Nation's First Income Gap Coverage... 'Gyeongnam Residents' Pension' to be Introduced in January Next Year

Gyeongsangnam-do, which has adopted ‘Welfare, Companionship, and Hope’ as the core values of the second half of the 8th local government term, is introducing ‘Gyeongnam Citizen Pension,’ the nation’s first personal pension support policy, to help residents prepare for income gaps.

On the 20th, Gyeongsangnam-do announced at the provincial government press center, “We are introducing the Citizen Pension to ensure that residents can maintain a stable life even during the period after retirement and before receiving public pensions such as the National Pension.”

Kim Ki-young, Director of Planning and Coordination Office of Gyeongnam Province, is explaining the introduction of the 'Gyeongnam Provincial Pension'. Photo by Lee Se-ryeong

The legal retirement age in Korea is 60, but the age for receiving the National Pension is currently 63 and will be delayed to 65 starting in 2033, creating an income gap period.

Gyeongsangnam-do explained that the Citizen Pension is a proactive welfare system designed to reduce economic difficulties during this income gap and to help residents voluntarily prepare for old age.

If residents deposit a certain amount monthly into a financial institution’s Individual Retirement Pension (IRP) system, the province plans to support a certain amount from local government funds so that the residents can receive benefits after up to 10 years.

Legally, the Individual Retirement Pension can be received as a pension or lump sum after 5 years from the subscription date and from age 55, but the final returns vary depending on the pension start age and the performance of the accumulated funds.

The province explained that if a resident subscribes to the Citizen Pension and pays 90,000 KRW monthly for 10 years in a monthly compound interest 2% fixed deposit type, and Gyeongsangnam-do supports 10,000 KRW monthly, including tax deduction benefits, it is equivalent to subscribing to a regular savings account with an interest rate of about 7.2%.

The proposed introduction of the 'Gyeongnam Provincial Pension' scheduled to be implemented in 2026. Provided by Gyeongnam Provincial Government Office.

The Citizen Pension is available to employed and self-employed individuals with income residing in Gyeongsangnam-do.

The province plans to complete administrative procedures such as ordinance enactment and consultations with the Ministry of Health and Welfare on establishing the social security system by the first half of this year, and to finish system construction, manual development, and budget allocation by the end of the year to implement the Citizen Pension in January next year.

Details such as age, income level, support amount per person, project scale, and project duration will be finalized around March through expert forums and public opinion surveys targeting residents in February.

Kim Ki-young, Director of Planning and Coordination, said, “While there is support for youth asset formation, this is the first project in Gyeongsangnam-do to support the income gap period for middle-aged and older adults,” adding, “We plan to help as many residents as possible prepare for old age and raise awareness about income gap preparation.”

He added, “I hope this will be of some help to the residents who have quietly fulfilled their responsibilities for regional growth while living in Gyeongsangnam-do.”

This content was produced with the assistance of AI translation services.