Korea's retirement income system comprises a modest basic pension and a public earnings-related pension scheme with a progressive formula, based on both individual earnings and the average earnings of the insured as a whole.
The overall index value for the Korean system could be increased by:
- Improving the adoption of ERSA scheme plans.
- Improving the level of support provided to the poorest pensioners.
- Introducing a requirement that part of the retirement benefits from private pension arrangements must be taken as an income stream.
- Increasing the level of funded contributions thereby increasing the level of assets over time.
- Improving the governance requirements for the private pension system, including the need for an audit.
- Improving the level of communication required to members from pension plans.
The Korean index value increased from 43.8 in 2015 to 46.0 in 2016 due to a number of small increases in all three sub-indexes.