ABSTRACT
The elderly in Korea, like those in other Asian countries, have traditionally been dependent on their adult children for income and other kinds of support. The concept of old-age income security, other that than via family transfers, as a function of the welfare state, was institutionalized only recently (Phang 2006). The National Pension Scheme (NPS) was introduced only in 1988 and is still immature and indeed has already undergone repeated reform. The retirement allowances paid as a lump sum when workers leave or retire from their job, Korea’s first income security measure, have also been recently reformed. Corporate or occupational pension schemes for most private sector workers (excluding those for some special occupational groups discussed in the last chapter) were only introduced, as a voluntary measure, in 2005. Personal pension plans, although available with tax benefits since 1994, remain a small component of retirement incomes. The Korean pension system should best be regarded as still developing, in contrast to advanced countries whose multi-pillar pension systems are already mature. The limited development and immature status of both public and private pensions is commonly regarded as the cause of the high rate of labour market participation by the elderly in Korea (OECD 2004b, World Bank 2000). This chapter critically reviews private and occupational pension schemes in Korea using the standards associated with the multi-pillar model (see also Chapter 5).
