IMF urges Korea to raise retirement age, delay pension payouts

SEOUL, November 26 (AJP) - The International Monetary Fund has recommended that South Korea raise its statutory retirement age to 65 and delay the start of public pension benefits to 68, according to a report posted on the IMF’s website.

Citing OECD research, the Fund said the proposed changes could lift total employment by about 14 percent and increase GDP by 12 percent by 2070.

The IMF said adjusting the retirement and pension system is essential to ensure long-term fiscal sustainability as the country confronts rapid population ageing. It also called for reforms to South Korea’s seniority-based wage structure, urging a shift toward performance-related pay.

Without changes to the wage system, simply extending the retirement age could have “unintended negative effects,” the report warned.

* This article, published by Aju Business Daily, was translated by AI and edited by AJP.

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