OECD's advice on pension and retirement systems worth consideration

(Yonhap Editorial)
SEOUL, June 22 (Yonhap) -- A report by the Organization for Economic Cooperation and Development (OECD) advised South Korea to raise its minimum pension-recipient age from the current 60 to 65 and improve its retirement system in order to cope with the problem of poverty among seniors.
The OECD's recommendations come amid concerns that the nation's public pension system might not be sustainable due to a spike in the number of pension recipients, caused by the country's fast-aging population. Prolonged low birthrates could also lead to a decline in workers to support senior citizens.
The report also said South Korea needs to improve its overall retirement system in the corporate sector, where workers usually retire before 60. It advised that the retirement system be scrapped in the long term. By providing jobs for seniors, they should be able to create income and they can prepare better for the absence of pension money for an additional five years.
Poverty among senior citizens has already become an acute problem for South Korea, and the OECD recommendations are worthy of consideration.
According to data released by Statistics Korea on Tuesday, the number of people aged 100 and over in South Korea has nearly doubled over the past five years, thanks to enhanced medical treatments and better health consciousness.
Statistics Korea said the country's centenarians numbered 1,836 as of November last year, up 91.1 percent from 961 tallied in 2005. The figures are based on the nation's census that is conducted every five years. The figures come as South Korea is quickly moving toward becoming an aged society with more than 11 percent of its total population of 49 million aged 65 and older.
In the middle of the 2000s, the risk of poverty among people between 66 and 74 was three times higher than the average risk for the entire population. The same risk for those aged 75 and over was 3.3 times higher than the average for the entire population.
The OECD said 45 percent of South Koreans aged 65 and older are given poverty status with their income being less than half of the average income for middle-class households. It is the highest percentage among OECD member countries.
The government and society should recognize the reality of senior citizens' poverty.
So the social security system, including the national pension system, needs to be adjusted. However, the raising of the pension-recipient age should be accompanied by necessary complementary measures to protect the livelihoods of those who will be hit hard by the adjustment.
The extension of the retirement age should be introduced before revising the pension system.
The government and corporations should take a positive stance to find optimum solutions.