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KMID : 1124020090250030221
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Korean Social Security Studies
2009 Volume.25 No. 3 p.221 ~ p.247
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Reform of Retirement Pension Schemes for Old-age Income Security
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Ryu Keon-Shik
Lee Bong-Joo
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Abstract
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The objective of this paper is to provide directions for reform of retirement pension schemes for old-age income security in Korea. Retirement pensions have not grown fast as expected. As of April 2009, the total participants account for about 10 percent of labor force and the ratio of pension plan assets to GDP is merely 3.8 percent. Based on the survey on the factors to prevent pension schemes from spreading wide, reforms are needed in terms of incentives to adopt pension scheme, funding regulation systems, pension benefit guarantee systems. Following directions are suggested to boost growth of retirement pensions: the limitation to the in-service withdrawal, compulsory participation to pension schemes, abolishment of interim payment system, expansion of the tax benefits, investment regulation based on qualitative standards, and strengthening to protect employee’s vesting right. In addition, some thoughts need to be given to secure the stable retirement income on pension asset allocation strategy and change in labor conditions such as salary peak system.
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KEYWORD
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retirement income security, income replacement rate, funding regulation, asset allocation strategy
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