State pension's income replacement ratio reaches 24%

The figure means South Korean pensioners receive a monthly pension payment of less than a quarter of their average monthly salaries during their overall working years. 

The number hovers well below the optimum level of 70 percent recommended by the Organization for Economic Cooperation and Development, as well as experts. The board has commissioned the Korea Institute for Health & Social Affairs to calculate the ratio.

South Korea set the income replacement ratio for pensioners with a 40-year subscription period at 70 percent in 1988, when it adopted the state pension program to guarantee income for the elderly after retirement, and to provide coverage for disabilities and surviving family members.

But the target has been on the decline amid worries about an early depletion of the national pension fund. The government cut the number to 60 percent 10 years later and 50 percent in 2008. The target is slated to drop 0.5 percentage point each year to 40 percent in 2028.

As of 2016, the state pension's nominal income replacement ratio stood at 46 percent, which experts say is far from enough to help retirees provide for old age.

According to the National Pension Service, South Korea had 21.56 million state pension program holders as of February in 2016. The NPS is the world's third-largest pension operator with assets of 545 trillion won ($490 billion) under its management, which are projected to reach 1,000 trillion won in about five years. (Yonhap)