South Korea Pension, In Bid to Boost Birth Rates, Considers Offering Loans to Couples For Wedding Expenses

wedding

South Korea is grappling with a number of demographic problems, including a rapidly aging population and a one of the lowest birth rates of any advanced economy.

The state’s public pension fund is particularly concerned, as it must pay out more benefits to the elderly even as its revenue stream (in the form of worker contributions) slows to a trickle.

The fund is now forced to consider creative solutions. One, discussed this weekend, is loaning money to young couples to encourage them to get married – and, ideally, have children.

From Korea Biz Wire:

South Korea’s national pension service is considering lending money to singles who delay or are reluctant to tie the knot because of wedding costs as a way to promote marriage and help raise chronically low birth rates, officials said Sunday.

South Korea is faced with mounting demographic problems as the ultra-low birth rate and the rapidly aging population are expected to seriously shrink the size of the labor force and depress economic growth. Such changes are also pressing on the pension operators who have to deal with increasing payments for the elderly while revenue drops.

The National Pension Service (NPS), under the wing of the Ministry of Health and Welfare, has been considering a wedding loan for singles, or those of a marriageable age, to support their housing plans, the biggest part of wedding costs, and other expenses.

In a fund management meeting in December, Health Minister Moon Hyung-pyo suggested using some of the pension funds on loans for singles to improve the welfare of young subscribers and reap higher returns from the loan businesses, according to ministry officials.

Korea’s National Pension Service manages about $300 billion in assets.

 

Photo by  Leland Francisco via Flickr CC License

Share This Post

Related Articles

Leave a Reply

Privacy Policy | © 2018 Pension360 and © 2014 Policy Data Institute | Site Admin · Entries RSS ·