Retirement Pension Lump-Sum Choice Hits 84%, Raising Old-Age Income Concerns

Korea’s Ministry of Employment and Labor and the Financial Supervisory Service shared at a retirement pension reform seminar that 84% of about 600,000 people who began receiving retirement pensions last year took the money as a lump sum instead of as a pension. Even among those who chose pension payments, 82% opted for short payout periods of 10 years or less, showing limits in using retirement pensions as long-term old-age income. The seminar discussed measures such as expanding lifetime annuity and long-term pension products. If the preference for lump sums remains high, the retirement pension system’s role in supporting old-age security could weaken, highlighting the need for institutional improvements. Source: mk.co.kr.