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A study on the Determinants of Purchasing and Preserving the Private Pension -the effect of firm's subsidy for contribution on employee's private pension-
Journal of Insurance and Finance
2013, 24(4),
pp.3-29
Publisher : Korea Insurance Research Institute
Research Area : Business Management
Publisher : Korea Insurance Research Institute
Research Area : Business Management
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The National Pension's fund is expected to exhaust in 2060, because of the aging population and National Pension(NP)'s generous benefit structure. Therefore, the parametric reforms of increasing contribution,decreasing benefit, or a mixture of them have been necessary. NP finally carried out the reform of decreasing payment rate from 60% to 40% in 2007. Even though the importance of private pension is rising,the application and persistency rate of private pension has been low since its introduction. The concern was enhanced in the subsidy to contribution of private pension which is similar to the Riester Pension in Germany. This paper studied the effect of the firm's contribution subsidy to employee's private pension. The data used in this paper is the 2000-2007 Survey of Korea Labor & Income Panel Study (KLIPS). In the static model, which was not considered for the state dependence, the firm's contribution subsidy significantly increased the application for employee's private pension. However, in the dynamic model, which was considered for the state dependence, the firm's contribution subsidy has no significant effect on the application for employee's private pension.
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