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Subscribers to state pension to start falling in 2017: report

All News 09:38 June 02, 2016

SEOUL, June 2 (Yonhap) -- The number of subscribers to South Korea's state pension fund is expected to start to drop from 2017 in the wake of the country's falling birthrate, a report said Thursday.

The National Pension Service (NPS) is likely to see the number of subscribers reach 21.67 million next year, down 100,000 from this year, according to the report by the National Pension Research Institute.

The figure is forecast to reach 21.77 million people at the end of this year, up from 21.56 million a year earlier. The number of NPS subscribers is estimated to decrease to 21.22 million in 2020. As of end-May, South Korea's population reached some 51.6 million.

In lockstep with the expected fall in subscribers, the growth rate of pension premiums is expected to slow in the coming years.

The increase rate is predicted to reach 6.1 percent in 2016, but the figure is likely to drop to 3 percent next year and 2.84 percent in 2020. The total value of pension premiums is estimated to reach 37.5 trillion won (US$31.5 billion), 38.7 trillion won and 42.2 trillion won in four years, according to the report.

South Korea adopted the state pension program in 1988 to guarantee income for the elderly after retirement and to provide coverage for disabilities and surviving family members. The NPS is one of the world's leading state pension plans with its assets reaching 512.3 trillion won as of end-2015.

South Korea has one of the lowest birthrates among major economies, fueling concerns that it could dent the country's growth potential and lead to more welfare expenses.

The government's latest data showed that the fertility rate, or the average number of babies that a woman is projected to have during her lifetime, stood at 1.24 in 2014, well below the level of 1.8 percent needed to sustain the current population.


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