KIHASA in the News
Among Elderly People, Beneficiaries of Multiple Pensions Are Only About 20 Percent…Released at the 8th Korean Retirement and Income Study Conference
- Media Date : 2021-07-02
- News Media : The Age of Centenarians
- Hits 157
Translated from The Age of Centenarians, July 2, 2021
Most basic pension recipients spend the benefits on cultural activities rather than on food...
As little as 22 percent of those aged 65 or older is in receipt of multiple pensions, with the benefits coming mostly from basic pension and the National Pension, a study found. According to the study, the average income older people received from both pensions as of 2018 amounted to a meagre 460,000 won, an amount not even close to the minimum cost of living.
Hwang Nam-Hui and Chin Hwa-Young, of KIHASA, who led the study on retirement incomes of older people with a focus on multi-tier income security schemes, released its results at the 8th Korean Retirement and Income Study Conference organized by the National Pension Research Institute of the National Pension Service. The conference took place at the Korea Chamber of Commerce and was live-streamed online. Five topics were discussed at the conference, including old-age income security; consumption and labor; retirement; income distribution and poverty; and life satisfaction.
According to Hwang, head of the Center for Research on Aging at KIHASA, among the over-65s, single pension beneficiaries, private or public--public pensions being the National Pension, the civil servant pension, and the teachers pension--account for 60 percent, and those receiving no pension benefits at all account for 14 to 16 percent. Multi-tier pension beneficiaries are those who receive benefits from more than one pension, including basic pension, national pension, and private pension. In Korea, there are still many people who are not receiving any pension benefits. Furthermore, the average amount of pension benefits is very small. It's because Korea's National Pension is not yet mature.
Older people in Korea are having difficulties in securing the entitlement to multi-tiered income sources, so basic pension and private transfer income play a big role in low-income elderly households, Hwang said, adding, “By raising the basic pension benefit level (currently, the maximum amount is 300,000 won per month), it would be possible to increase the economic independence of the elderly and reduce their children’s burden of support.
Seol Kwi Hwan from the Korea Research Institute for Vocational Education & Training, who analyzed older people's spending of basic pension money with mental accounting, found out that they spent their public income transfer on transport, communications, cultural activities, and accommodations rather than on essential food purchases.
The term ‘mental accounting,’ first named by Richard H. Thaler, an American economist, refers to the process whereby people value the same amount of money differently depending on its sources and thus budget it as different expense categories. Because the value of 50,000 won earned by working hard for a month is felt different from that of 50,000 won from a lottery win, the way they spend it is different.
The fact that basic pension is used for non-essential consumption such as cultural and leisure activities rather than food suggests how much abundant life basic pension brings to the elderly, he said.
The life satisfaction of volunteers was found to be higher than that of non-volunteers among the elderly population, in particular, the satisfaction of those who received support from society for their volunteering activities turned out to be highest, said Kim Mee Ryung, a professor of community development and welfare of Daegu University, in her presentation on her study on ‘How the capital of elderly volunteers impacts their life satisfaction.’
According to professor Kim, the capital of elderly volunteers includes human capital, social capital, and cultural capital, with human capital referring to their health, economic revenues, and educational levels, social capital referring to their social and personal relationships, and cultural capital referring to religion, altruism, etc. He said that it is important for these older people to receive social support and recognize such support when given for their life satisfaction.
Also, among the volunteers, their life satisfaction was higher if they had a spouse. And the satisfaction of male volunteers was higher than that of female volunteers.