Early retirement should be something that most workers look forward to, and while receiving a pension, you can also have time to do what you like and enjoy your old age. But the retirement life of the elderly in South Korea has begun to get worse and worse...
The Korea National Pension Fund (NPS) predicts that South Korea's national pension will start to run deficits in 2041 and be completely depleted by 2055. According to the current trend, South Korea's "post-95s" will no longer have a pension when they retire.
South Korean pension has entered "hell mode".
South Korea's pension is urgent, the essence is also the aging crisis, what problems does this phenomenon reflect? What is wrong with the Korean pension system? And how to solve it?
To answer the above questions, a detailed analysis of many factors is required.
Let's start with the beginning of South Korea's pension construction.
【The lag of South Korea's pension system】
In 2005, UNCTAD issued an announcement that South Korea officially entered the ranks of developed countries, becoming the third developed country in Asia after Japan and Singapore.
Since it is a developed country, there must be a sound pension system, and the elderly living in developed countries should rarely have too much trouble with economic resources, even the minimum standard pension can meet the daily basic needs of the elderly.
However, South Korea is an exception.
Compared to other countries, South Korea's national pension system started late. In 2020, South Korea's vice minister of finance, Kim Yong-beom, publicly stated that South Korea's national pension system was only established in 1988.
At first, only enterprises with more than 10 employees would contribute, and by 1992, the national pension was extended to units with 5 or more employees;
In 1995, self-employed individuals engaged in agricultural and fishing work also opened a pension contribution business; It was not until 1999 that South Korea's pension system covered all workers.
The late establishment of the pension system has exposed two problems in South Korea:
First, after the end of the Korean War, South Korea did not pay attention to national welfare policies for the first time.
In the course of regime change, the South Korean government's leadership direction was always to develop the economy as the primary goal, and it was not until Chun Doo-hwan stepped down in February 1988 that the National Pension Fund was officially put on the agenda, but it was a little too late.
Second, the late implementation of the pension system led to a low base pool of the Korean National Pension Fund and did not produce the scale effect of capital, which in turn led to the fund management department being unable to invest in low-risk projects with stable returns on a large scale.
In order to quickly increase the scale of pensions, the proportion of South Korea's pension investment stocks is 12 percentage points higher than that of ordinary countries.
Under such a high-risk investment strategy, South Korea has experienced the baptism of the Asian financial crisis in 98 and the subprime mortgage crisis in 08, the total number of pensions in South Korea fluctuates significantly, the overall growth is slow, and the national pension system is not perfect and perfect.
However, the South Korean government's attitude is very objective.
Because South Korea was creating an economic myth.
In 2000, South Korea's GDP was 561.633 billion US dollars, and the per capita GDP was 12,300 US dollars, which is close to the level of developed countries. Since then, South Korea's GDP has grown at an alarming rate, and it deserves to be one of the "Four Asian Tigers".
Therefore, the South Korean government at that time firmly believed that in the near future, South Korea would definitely become a developed country, and the situation was very good, even if the pension system was established late, it would avoid risks under the high-speed growth economy.
However, behind the high growth of South Korea's economy, there are also many pathological phenomena in society....
【There are elderly Koreans who are retiring】
How hard do old Koreans fight?
In the Korean elderly labor market, security, cleaning, and supermarket cash register are all popular industries. In Seoul, an average of 5.3 seniors over the age of 65 compete for each position, and the monthly salary for these jobs is about 270,000 won, or about 1,500 yuan.
Young people are engaged in grassroots positions in society, such as taxi drivers, factory workers, takeaway delivery workers, and elderly people compete for employment. These jobs have long working hours, high risks, need to work night shifts, and are easy to overwhelm their bodies, but there are still elderly people who want to do it.
Some elderly people will confess during the interview that if there is no job, he and his wife really can't even eat.
Data show that the employment rate of the elderly in South Korea has steadily increased in recent years, and more than half of the elderly in their 60s and 30% of the elderly in their 70s are still working. South Korea's real labor market retirement age is as high as 73 years old, which is more than 10 years higher than the real retirement age in developed countries.
How did the strange phenomenon of having a pension but still having to work out came about?
First, although South Korea began to implement the national pension plan in 1988, less than 20% of South Korea's total working population paid pensions, and by 1999, less than 50% of the Korean population had paid pensions.
This means that half of South Koreans have not had time to contribute long enough to receive their pension.
Secondly, the cost of living in South Korea is too high. In general, the minimum standard of national pension should be proportional to the price of goods in the country, but due to the late establishment of South Korea's pension and the small number of contributors, South Korea's pension cannot keep up with the increasingly high price level.
According to the data, most elderly people in South Korea can receive a monthly pension of 100,000 to 200,000 won, about 543~1087 yuan. Compared to the cost of living with millions of won, it is really a drop in the bucket.
Finally, some of the pressure on young Koreans is transferred to their parents.
According to a 2015 data survey, more than half of young people in South Korea still need parental support when they become adults, and the amount of support is generally 300,000 to 700,000 won per month. Even if young people have jobs, they have difficulty coping with high wages, marriage, and children, so many elderly South Koreans subsidize their children and work odd jobs to support themselves.
The above three points are important factors in the increasing poverty of the elderly in South Korea.
What is more troublesome for the South Korean government is that the maintenance of the pension system needs to rely on the pension insurance paid by young people to support, and at present, South Korea has completely entered the era of low fertility...
【The last train of Korean pension】
According to 2022 data, South Korea's total fertility rate is 0.79, a new low.
What is the concept of 0.79?
This means that the average couple in South Korea will only have 0.79 children, and more and more young Koreans are starting to have no children.
For this reason, some people are pessimistic that South Korea may become the first country in the world to disappear naturally by 2065. Such warnings may be alarmist, but the pension crisis caused by low fertility is getting worse.
According to the current trend of aging population in South Korea, after 2032, the elderly population aged 65 and above will climb all the way, and the rate of pension consumption in South Korea will also increase with it, and it is expected that by 2041, South Korea's pension income and expenditure will begin to be unbalanced, entering a period of negative growth, and South Korea's pension will be exhausted by 2055.
The situation is serious, and the South Korean government is doing everything possible to encourage young people to marry and have children early.
In 2022, the South Korean government spent more than $2 trillion on fertility policies, but ironically, this year, South Korea's annual fertility rate hit a record low, and young Koreans are not willing to regenerate.
The reasons why young people do not want to have children are mentioned above. Rising consumption levels, increasingly competitive jobs, and South Korea's unique chaebol monopoly are entrenching their class, resulting in a growing rejection of marriage and childbirth.
To add insult to injury, South Korea's extreme gender antagonism is also affecting young people's views on marriage and even fertility. Many young Koreans believe that not having children maximizes happiness and maintains one's quality of life until now.
At present, Korean families who are willing to have more children are basically middle-class and above in South Korea, they themselves have no economic pressure, and their own elderly can be well protected even if they do not have pensions. What really enters the vicious circle is the larger population of South Korea's middle and lower class cities.
The less money you have, the more you need to have children, and because the less money you have, the more you don't want to have children.
So, in the face of the pension crisis, how will the South Korean government solve it?
【Korea Pension Rescue Plan】
In fact, South Korea's pension rescue plan is similar in many countries.
The first is the delayed retirement age, which was initially 61 years old in South Korea, regardless of gender; After 2013, it will be raised every five years, and by 2033, the legal retirement age in South Korea will reach 65 years.
But because low fertility is accelerating South Korea's pension consumption rate, the plan does not alleviate the urgent need for pensions.
Therefore, some experts even suggest that South Korea should directly abolish the retirement age.
However, whether it is delaying retirement or canceling the retirement system, these policies will cause strong dissatisfaction among South Koreans, after all, for South Koreans, late retirement and non-retirement are only a choice between bad and worse, and do not bring actual benefits to personal interests.
Another way is to increase the proportion of pensions paid in the wages of the next generation of South Korea's working population.
It is estimated that 26% of the wages of the next generation in South Korea will be used to pay national pension insurance premiums. If the low fertility rate continues to be severe, South Korea's working population will need to contribute half of their wages to insurance contributions by 2080.
At that time, it is bound to cause new turmoil in South Korean society, and many Korean college students have said that if the pension payment limit is rising, they will give up participating in the work, because this is a disguised compression of their income.
In a Korean variety show, a middle-aged white-collar worker in South Korea realistically talks about the current environment of Koreans, she said:
"With the exception of civil servants, most companies let their employees leave early in their early 50s, and those who are 'retired' cry bitterly, they want to work and need to work, and they simply do not work at the legal retirement age of 61."
In private interviews, many young Koreans even said that they may consider immigrating to China before retirement, where the pension environment and services are better, at least their next generation will not be anxious about their own pension.
【The author said】
In fact, not only South Korea, but many developed countries in the world are facing pension pressure.
For example, earlier this year, France proposed to extend the legal retirement age to 64, sparking mass demonstrations by workers. Obviously, South Korea's problems are by no means unique, but slightly more obvious than in other countries.
As for how South Korea's pension crisis and aging crisis will be solved in the future, it is unknown.