20-year subscribers for pension hits 1M

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20-year subscribers for pension hits 1M

The number of people contributing to the national retirement pension system for 20 years exceeded 1 million for the first time, according to the National Pension Service yesterday.

All full-time workers are required to enroll in the national retirement pension system. To be eligible for a monthly subsidy after 60 years of age, 10 consecutive years of payments are required.

The pension service said if the 20-year subscribers, who are mostly in their 40s, contribute until they become 60-years-old, they will receive at least 1.08 million won ($960) monthly. The maximum monthly payout is 1.84 million won in today’s won-denominated terms.

The pension service expects that in 2016, the number of 20-year subscribers will reach 2 million people.

The number of current pensioners is more than 3 million, which means one in three Koreans over 60 is the beneficiary of a monthly pension.

More than 5.5 million Koreans have paid into the National Pension Service for 10 years or more. In 2016, that number is expected to reach 8 million.

The number of pre-pensioners - baby boomers born between 1955 and 1963 and eligible for pension payouts - is estimated to be about 2 million.

Experts say baby boomers haven’t fully prepared for their retirement, because they concentrate on supporting their parents and raising their kids.

Their ranks will rise to 3 million people in 2015, the service expected. The pension service explained that the longer people pay into the pension system, the higher their monthly benefits will be. Each year workers pay into the system beyond the mandatory minimum of 10 years will result in an additional 5 percent payout per year.

“The number of subscribers to the national pension has exceeded 14 million,” the service said.

The average age of Koreans is rising. It has grown from 25.9 in 1980 to 38 in 2010. The ratio of people over 65 was 3.8 percent in 1980, but experts predict that the rate will increase to 38.2 percent in 2050.

By Kim Hee-jin [heejin@joongang.co.kr]
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