Choi Sun-hee, a 56-year-old housewife, recently bought the national pension policy, although she was not obliged to.

She will be paying around 140,000 won a year for the next 10 years and will start receiving around 250,000 won every month from then. “It is a bank savings program with the highest interest rate, you can say,” she said.

Choi admitted that she wasn’t too keen to join the pension program at first because she thought she wouldn’t make a fortune out of it. That deterred her from subscribing to the program.

Then she changed her mind. “I thought I will need some pocket money even after the husband’s retirement. Receiving 1.7 times the premium doesn’t sound bad. And the payment reflects inflation rate, which made the whole thing much more attractive,” she said.

Choi is one of 490,000 people who have started to subscribe to the national pension plan voluntarily in the first half of this year. Currently, salaried workers are obliged to and self-employed people are strongly encouraged to join the pension program, but those without income are placed in a gray area.

With the revision of a relevant law, companies hiring part-timers and universities with lecturers who provide their labor for more than 60 hours a month should subscribe to the national pension plan for them. The National Pension Service has also lowered the premium for individuals, encouraging more people to buy the policy. 

The NPS is running a Post-Retirement Center at each of its 140 branches nationwide to provide consultation and information on possible investment for the retirees. The centers have 20 internationally certified financial planners and 537 associate financial planners.

Observers said the fundamental reason for the increase in subscription was the fact that the pension payment rises in accordance with inflation and is paid until one’s death. Spouses of the subscriber can receive spousal payments when the subscriber dies. It is a move to guarantee certain level of living for not only the members but also their families.

“The number of new subscribers have doubled within a year. It seems that more people have understood the national pension’s role and importance as a social welfare net,” an NPS official said.

By Bae Ji-sook (baejisook@heraldcorp.com)