This study identified the characteristics of public pension(national pension, occupational pension) benefits of individual retirees and retired households and analyzed the realized income replacement rate of public pensions. In order to determine the ...
This study identified the characteristics of public pension(national pension, occupational pension) benefits of individual retirees and retired households and analyzed the realized income replacement rate of public pensions. In order to determine the extent to which public pension benefits actually replaced their income and living expenses, the calculation of the realized income replacement rate was based on the income level of the pre-retired group, the current income and expenditure of retirees and retired households, as well as the minimum cost of living and adequate cost of living. The characteristics of pension benefits and the realized public pension replacemenr rate were compared according to the type of public pension and retired household type. Data from the 2019 Korean Retirement and Income Study were used. For research question 1, all retirees(n=2,852) were analyzed to compare total realized income replacement rates depending on whether they received public pension benefits or not. Research question 2 targeted only public pension recipients (n=1,062) to analyze the realized income replacement rate of public pensions, and compared recipients of national pension and occupational pension. For research question 3, retired households received public pensions(n=789) were extracted to analyze the realized income replacement rate of public pensions at the household level. The types of retired households were divided into single-beneficiary households, beneficiary couple households, and beneficiaryunemployed couple households. Key findings from the analysis were as follows: First, among the retired individuals, 37.2% received monthly benefits from public pensions, and the average income of public pension recipients was found to be 2.8 times the average income of non-recipients. As a result of comparing the total realized income replacement rate(income of retirees compared to the income of pre-retired 56-61 year old group, 16.2% for non-recipients of public pension and 45.2% for public pension recipients. Second, the average monthly benefit of public pension recipients(n=1,062) was only 24.5% of the income of pre-retired group, and only covered 47.3% of what they estimated to be adequate cost of living. Third, the average monthly benefit of public pensions was 699,000 won, but the amount received by national pension recipients(n=844) was 330,000 won and that of occupational pension recipients(n=218) was 2.126,000 won. Compared to the income of the pre-retired group, the average benefit of occupational pensions was 74.6%, while the average benefit of national pensions was only 11.6%. Fourth, single-beneficiary households had the lowest amount of public pension benefits(449,000 won) and had a higher rate of receiving national pension. The heads of single-beneficiary households were mainly women with low level of education and a high average age, and their household income, expenditures, and costs of living were all at the lowest, making them a vulnerable group.