Korea to improve accuracy of financial estimates for 8 public insurances

Published : Mar 24, 2017 - 14:29 Updated : Mar 24, 2017 - 14:29

South Korea will carry out an integrated assessment of its eight public insurances' long and mid-term financial estimates in 2018 in a way to better deal with their potential deficit due to the country's rapidly aging population, the finance ministry said Friday.

According to government data, eight public insurances, including the National Health Insurance Service, will see their total expenditure reach 220 trillion won ($195.9 billion) in 2025, up from 106.2 trillion won tallied in 2016.

(Yonhap)

The National Pension Service's payment will also more than double to 44 trillion won from 18 trillion won over the 10-year period as the baby boom generation, who was born between 1955 to 1963, enters a group of pensioners.

At the same time, the National Health Insurance will likely run into the red in 2016 and the Employment Insurance is also forecast to suffer a deficit from 2020.

The Ministry of Strategy and Finance said the integrated assessment of their financial estimates for the next 70 years will start next year on a comparable basis.

So far, the insurance operators have carried out their respective assessment of financial estimates every five or three years.

"As Korea is suffering from a low birth rate and rapid aging, the public insurances face fiscal risks at a faster-than-expected pace," Finance Minister Yoo Il-ho said at a government meeting in Seoul. "Based on the precise 70-year long forecast, we have to map out a sustainable plan to strike a balance in the public funds." (Yonhap)