More Benefits for Old Folks
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More Benefits for Old Folks
With the parliamentary approval of the Basic Retirement Fund Law on May 2, the government is set to begin the additional retirement fund payment from July to those 65 years or older

24(Tue), Jun, 2014



Dir-Gen Yang Seong-il of the National Pension Bureau of 

the Ministry of Health and Welfare.(Photo:MOHW)



The following are excerpts of an article contributed by Dir.-Gen. Yang Seong-il of the National Pension Bureau of the Ministry of Health and Welfare. He discusses how the Basic Retirement Fund was created to supplement the National Pension Service to give more pension funds to senior citizens aged 65 years and older, including the qualifications of those who are entitled to benefit from the additional payment and how much they can receive under the new pension system.

The director-general starts by noting that the poverty rate among senior citizens in Korea stands at 49.3 percent based on a 2012 survey, the highest among the 34 OECD member countries, showing that Korea has to reform the retiree support system to ease the pain of poor old folks.

A major reason for the situation has been that the current retirement stipend system was launched back in 1988 with only 32 percent of the retirees entitled to get the stipend, which breaks down to 320,000 won a month on average, not enough to fully maintain their livelihood. 

In order to help ease the pain, the basic senior citizens annual stipend system was introduced in 2008, with a monthly payment coming to only 99,000 won, woefully short to solve the problem. The fund itself has encountered problems of its own as it is separate from the National Pension Service, bringing greater financial burden to the future generations as they have to pay those funds out of their monthly salary and the payment is fixed even if the national pension fund payment is increased as it matures and improves the lives of the recipients. For those reasons, the basic retirement fund can be terminated due to the lack of funding sources.

Despite these problems, the legislature finally gave its approval for the Basic Retirement Fund Law on May 2 to provide around 10 trillion won more to the retired senior citizens and help them improve their lives.

According to the Basic Retirement Fund Law, anyone 65 years of age and older are entitled to the monthly stipend, which would vary depending on the other social benefits they receive, to provide more money to those who are in serious poverty and also to lighten the burdens on the future generations of salary earners who have to pay into the fund.

Based on 2014 data, 4.06 million out of 4.47 million who get the monthly stipend from the National Pension Service will be entitled to the Basic Retirement Fund Law, with 90 percent of them to get the full 200,000 won in monthly stipend and the rest, or 410,000 retirees, would get only 150,000 won per month under the current projection. The entire fund will come from government tax revenue.

Currently, the government has been working things out so that the Basic Retirement Fund can be paid starting July 25. The government has to make up the implementation decree, the implementation regulation, and the electronics system, among others, including training the personnel who will take charge of the systems and regulations at help counters around the country. 

Those who have been paid the monthly stipend from the National Pension Service and are 65 years or older should apply for the Basic Retirement Fund at dong, eup, and myeon offices. Those who have been getting the monthly stipend from the pension fund will not have to apply for the Basic Retirement Fund as their records are already with the National Pension Service and their monthly payments will be determined by their records. Some may not be able to get the monthly Basic Retirement Fund due to excessive applications, but will get it in August along with the stipend for July.  

   
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