Elderly people gathering at Tapgol Park in central Seoul to spend their free time. (Yonhap)
SEOUL, Aug. 28 (Korea Bizwire) — South Korea’s government spending on public pensions, a primary means of addressing senior poverty, is merely half of the expenditure of other countries within the Organization for Economic Cooperation and Development (OECD), a report showed Sunday.
According to Pensions at a Glance 2021 published by the Paris-based organization, a mere 9.4 percent of the South Korean government’s total expenditures were allocated to public pensions in 2017, marking the second lowest among all 38 member states, only ranking higher than Iceland.
Public pensions constitute an average of 18.4 percent of total social expenditure in the majority of countries.
South Korea’s expenditure on public pensions accounted for just 2.8 percent of its gross domestic product (GDP), which is less than half of the OECD average (7.7 percent), and fell short in comparison to other nations such as France (13.6 percent), Germany (10.2 percent) and Japan (9.4 percent).
In 2018, senior poverty in South Korea reached 43.4 percent, a staggering three times higher than the OECD’s average of 13.1 percent.
Experts emphasize the imperative of increased financing for public pensions, given South Korea’s elevated senior poverty rate and its relatively limited spending on public pensions.
“National pensions possess a redistributive component that distinguishes them from other insurance schemes, which merely provide returns on payments made. Moreover, the ultimate responsibility for these pensions rests with the state,” said Joo Eun-sun, a social welfare professor at Kyonggi University.
“Should public pensions surpass a certain magnitude, the contributions made by workers may no longer suffice to cover the necessary payouts.”
H. M. Kang (hmkang@koreabizwire.com)
