ageing in korea · 2013-11-21 · dr. jun kwang-woo distinguished professor, yonsei university...
TRANSCRIPT
Dr. Jun Kwang-woo Distinguished Professor, Yonsei University
Former Chairman & CEO, National Pension Service (NPS) Former Chairman, Financial Services Commission (FSC)
Former Ambassador for International Finance, Korea
Ageing in Korea Trends, Issues and
Policy Implications
1
CONTENTS
Opening Remarks
3 Health and Long-Term Care
Population Ageing in Korea 1
2 Public Pensions
4 Quality of Life and Employment
Closing Remarks
Policy Implications 5
1
Population
Ageing
4.53
2.82
1.57 1.47
1.23
58.67
61.78
67.29 72.25
77.20
65.57
70.04
75.51
79.60
84.07
55
60
65
70
75
80
85
90
0.0
1.0
2.0
3.0
4.0
5.0
1970 1980 1990 2000 2010
Lif
e E
xpecta
ncy a
t Bir
th
Tota
l Fert
ilit
y R
ate
Year
Female LE
Male LE
TFR
Demographic Change : Fertility and Life Expectancy Slide No. 1
(Source: Statistics Korea , 2011)
Population Projection, 2010~2060
52,160
43,959
54,783
49,410
34,469
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060
po
pu
lati
on
(1
,00
0s
)
year (Source: Statistics Korea , 2011)
Medium
Low
High
Pop. estimates
Slide No. 2
Population Composition by Age, 1960-2060
42.3 42.5 34.0
25.6 21.1 16.1 13.2 12.6 11.2 9.9 10.2
54.8 54.4 62.2
69.3 71.7 72.8 71.1
63.1 56.5 52.7 49.7
2.9 3.1 3.8 5.1 7.2 11.0 15.7 24.3
32.3 37.4 40.1
0%
20%
40%
60%
80%
100%
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060
year
0-14 15-64 65+
(Source: Statistics Korea 2011; medium variant)
variant)
Slide No. 3
Youth and Old-Age Dependency Ratio, 1960-2060
77.3
78.2
54.6
36.9
29.4
18.6 20.0 19.8 18.9 20.5 5.3 5.7 6.1 7.4 10.1
22.1
38.6
57.2
71.0
80.6
0
20
40
60
80
100
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060
de
pe
nd
en
ts p
er
10
0 w
ork
ing
a
ge
po
p.
year
youth old-age
(Source: Statistics Korea, 2011; medium variant)
Slide No. 4
Total Dependency Ratio: International Comparison
37.3 38.2
56.4 55.1 53.3 51.4 52.5 46.9
54.2 51.2 46.9 44.0 49.6 48.0
101.0
75.7
95.7
51.7
77.3 73.3
85.6 86.8
74.0 84.5 87.2
73.7 68.1
73.5
0
20
40
60
80
100
120
dependents
per
100 w
ork
ing
age p
op.
2010 2060
(Source: UN, 2010 & Statistics Korea, 2011)
Slide No. 5
2
Public Pension
Structure of Public Pension Slide No. 6
Brief History of the National Pension - Expansion of Coverage
1987 Legislation of the National Pension Act
1988 Enforcement of the scheme
(workplaces with 10 or more full-time
workers)
1992 Expanded to workplaces
with 5 or more full-time workers
1995 Expanded to rural areas
1999 Expanded to urban areas
Slide No. 7
Coverage of Public Pension
Working Age 15-64 Labor Force 15-64
Total insured persons 57.0% 90.6%
Active contributors 40.4% 64.2%
Working Age 18-59 Labor Force 18-59
Total insured persons 64.7% 95.7%
Active contributors 45.8% 67.7%
Sources: IMF OAP/FAD Conference (Seong Sook Kim, 2013)
Slide No. 8
Recipients of Public Pension Benefits
Total
population of
aged 65 and over
Basic Old Age
Pension (BOAP)
Recipients
Recipients of
the National Pension (NP) and/or
Public Occupational Pensions (POP)
Non-recipients
5,701
(100%)
3,796 (66.6%) 1,799 (31.6%)
1,013
(17.8%)
only BOAP 2,889 (50.7%), NP & BOAP 907 (15.9%),
only NP or only POP 892 (15.7%)
<Total = 4,688 (82.2%)>
(unit : thousand persons, %)
Sources: IMF OAP/FAD Conference (Seong Sook Kim, 2013)
Slide No. 9
Overview of NP & BOAP
National Pension (NP) Basic Old Age Pension (BOAP)
Introduction 1988 2008
Coverage All employees and self-employed
aged 18-59 70% of the elderly aged 65 +
Type of program Social insurance
(DB plan)
Social pension
(means-tested, tax financed)
Pensionable
Age
61
(gradually rising to 65 by 2033) 65+
Source of funds 9% of gross monthly earnings
(4.5% employee, 4.5% employer)
70% from central government & 30%
from local government
Minimum years
of coverage 10 years of contribution No contribution required
Old-age benefits
40% (2028)
(40-year contribution record,
average earner)
5% of the average monthly income
of NP participants
Slide No. 10
Adequacy and Sustainability
Inadequacy of old-age income security Low coverage of public pension : 57.0% (Working Age 15-64)
Sustainability of the National Pension
According to the 2013 financial review, the National Pension fund will
be depleted by 2060
Low benefits
NP old-age benefit : 15.4% of the average monthly income (NP)
BOAP old-age benefit : 5.0% of the average monthly income (NP)
Slide No. 11
3
Health
Prevalence of Chronic Diseases and Disability
• Most of elderly Koreans are suffering from chronic disease and
disability
- Chronic diseases : 88.5%
- Daily activity limitations : 37.8%
- Need for help in daily living : 17.8%
(Korean National Health & Nutrition Examination Survey, 2005)
(National survey of the actual living condition of the elderly, 2010)
Slide No. 12
Facing the Challenges of Dementia
(Source: Ministry of Health & Welfare)
• The elderly with dementia are about 420 thousand in 2008
- the entire of medical cost on dementia is 503 billion won(2008)
The number of the elderly with dementia
(Unit : 1,000 persons)
2008 2009 2010 2011
Over 65 year old 5,016 5,193 5,357 7,701
Over 65 year old
(dementia) 421 445 469 750
Rate of dementia (%) 8.4 8.6 8.8 9.7
Slide No. 13
Health Care Expenditure for the Elderly
• Between 2000 and 2009, health care expenses in the National
Health Insurance have grown by 12.8%
The elderly are expected to consume 65.4% of total health
care expenses in the National Health Insurance in 2030
(Source: NHIS, 2008)
37.9 45.6
56.1
65.4
0
20
40
60
80
2015 2020 2025 2030%
Slide No. 14
4
Long-Term Care
Long-Term Care Insurance : Background
• More and More elderly Koreans
are living longer and entering
the age when they need care
• With smaller families and
increased female labor force
participation, proving long-
term care for the elderly
becomes more and more
urgent in Korea
July 2008 Introduction of the Long-Term Care Insurance
5.8
6.5
7.2
8.6
5
6
7
8
9
10
2010 2015 2020 2030
Projections : long-term care beneficiaries
%
Slide No. 15
Long-Term Care Insurance : Beneficiaries
National Health Insurance ( + medical aid)
2012.6
Over aged 65 (A) 5,540,000
Eligible for LTC (B) 327,766
A/B 5.9%
(unit: person)
(source: NHIS statistical yearbook,2012)
Beneficiaries of Long-term care insurance
147
269
312 320 328
0
50
100
150
200
250
300
350
2008 2009 2010 2011 2012
The Number of Beneficiaries
(Unit: 1,000 persons)
Slide No. 16
Long-Term Care Insurance : Benefits and Financing Slide No. 17
Facility benefits
In-home benefits
Special Cash
benefits
Benefits Financing
Long-term care contribution
Government Support
6.55% (2012) of the National
Health Insurance contribution
rate
20% of the cost of LTC benefits
5
Family & Quality
of Life
Projected Households : aged 65 and over
17.78
40.54
0
10
20
30
40
50
2010 2035
Elderly-headed Households : 2010 and 2035
%
• The percent of elderly-headed households is
expected to increase dramatically by 2035
Slide No. 18
Type of Households : Aged 65 and Over
• Elderly Koreans are more likely to live alone and the proportion
of single person households is expected to increase even further
33.6
9.6
34.2
22.5
32.3
8.8
38.0
20.9
0
10
20
30
40
50
couple couple withchildren
single-person other
Elderly Households by Type: 2010 and 2035
2010 2035%
Slide No. 19
Economic Hardship of the Elderly
AUT CAN
DNK
FIN
FRA DEU
GRC
IRL
ITA
JPN
LUX
MEX
NLD NZL
NOR
ESP
SWE
TUR
UKD
USA
CZE
AUS
HUN
CHE
KOR
ISL SVK
PRT
POL
BEL
0
5
10
15
20
25
30
35
40
45
50
0 2 4 6 8 10 12 14 16 18 20
Old-age poverty rate (%)
Population poverty rate (%)
Income poverty rates by age
Old less
likely to be
poor
Old more
likely to be
poor
• Currently, elderly Koreans experience the highest poverty rate
among OECD countries
(Source: OECD Income Distribution database; see OECD (2008), Growing Unequal?)
Slide No. 20
Social Integration
(per 100,000 population)
(source : OECD, Society at a Glance – Asia/Pacific Edition 2011 )
Slide No. 21
9 11 13 12 18
27
18 22
72
0
10
20
30
40
50
60
70
80
Asia/Pacific OECD Korea, Rep
Suicide rates by age 15-34 35-64 65+
• Economic hardship
• Erosion of the
traditional family
support base
Elderly Koreans are weakly integrated into the society
6
Employment
Ageing Workforce
• 35.6% are over 50 (2013.6)
• 60+ group : 9.8% (2003.6) ▶ 13.6% (2013.6)
(Source: Statistics Korea)
Slide No. 22
24.0
9.8
35.6
13.6
0
5
10
15
20
25
30
35
40
50+/total 60+/total
Labor force by age group
2003.6 2013.6
11.6%p
3.8%p
Labor Force Participation Rate (65+)
• Labor force participation rate of elderly Koreans stands at 29.4%,
the second highest level among OECD countries in 2010
(Source: http://stats.oecd.org)
Slide No. 23
29.4
17.4
4.0 5.9
12.1
21.8
8.6
0
5
10
15
20
25
30
35
Korea US Germany Nertherlands Sweden Japan UK
Employment Status of the Elderly Slide No. 24
• Despite their higher LFPR, elderly Koreans are facing poor
employment conditions and work insecurity
16.9 33.6
45.2
32.6
35.2
42.0 50.5
31.2
12.8
0
20
40
60
80
100
age 15-49 age 50-59 age 60+
Old worker’s employment status in 2010
Regular Employees
Irregular employees
Self-employed
• Irregular employees include temporary, daily and unpaid family workers
(Source: MOL,2012)
7
Policy
Implications
Policy Directions for Population Ageing
• Build a multi-pillar income security system for retirement
• Establish a comprehensive and sustainable health care system
• Provide employment opportunities for older workers
• Support active and successful ageing
Slide No. 25
Policy Recommendations
• Improve adequacy and long-term financial sustainability of the
National Pension
• Expansion of Basic Old Age Pension
• Promote private pensions as a complement to public pension
Build a multi-pillar income security system for retirement
• Reinforce regular checkups and build a preventive health care
system
• Promote chronic disease care programs and expand Long-Term Care
insurance coverage
• Stabilize medical cost and improve financial soundness
Establish a comprehensive and sustainable health care system
Slide No. 26
Policy Recommendations (continued)
• Create new job opportunities for the elderly
• Promote senior-friendly work environment
• Provide job training programs and support older workers to start
their own business
Provide employment opportunities for older workers
• Strengthen safety net programs and support vulnerable seniors and
their families
• Promote social and leisure activities for the elderly
• Develop and support lifelong learning programs
Support active and successful ageing
Slide No. 27
THANK YOU