High earners to pay higher premiums for state pension

SEOUL, March 28 (Yonhap) -- High-earning subscribers to South Korea's national pension scheme will pay slightly more in premiums starting July due to a change in related rules, the health ministry said Thursday.

On July 1, the ceiling for subscribers' monthly income will rise to 4.86 million won (US$4,270) from the current 4.68 million won, according to the Ministry of Health and Welfare, which oversees the state pension fund.

The income ceiling serves as the basis for calculating premiums for those who earn more than that. The changed ceiling will be in place till June next year.

The ministry said the hiked ceiling will affect 2.51 million subscribers, or 11.4 percent of the total, who will pay up to 16,200 won more in monthly premiums.

Premiums will remain flat for those who earn less than the monthly income ceiling.

Salaried workers are required to make specified monthly contributions to the fund for a certain period in order for the worker to be eligible to receive a pension after retirement. They share the premiums evenly with employers.

The ministry added the increased premiums will entitle those high-income subscribers to receive greater payments in the future.

South Korea introduced the state pension program in 1988 to guarantee incomes for the elderly after retirement and to provide coverage for people with disabilities. The state pension fund ranks as the world's third-largest, with 630 trillion won in assets.
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