Local government plans to provide pensions as incentive for raising the birth rate
- Pension insurance has emerged as a new method of addressing South Korea’s low birth rate.
- Boeun County in North Chungcheong Province announced on Dec. 18 that it would be providing pension insurance to women within its jurisdiction who give birth to a third child. It marks the first time a local government has gifted pension insurance to mothers of three children.
- By paying premiums of 100,000 won (US$92) a month until they are 59, mothers are entitled to pensions from the country for 30 years from the age of 60.
- With a market interest rate of around 2.5% for pension products, the county predicted a mother who enrolls after giving birth to a third child at age 30 could receive a pension payout between 73,000 and 130,000 won (US$67-120) a month.
- The county, which provides childbirth encouragement payments of 1 million won (US$920) for a first child, 1.2 million won (US$1,100) for a second, and 4.2 million won (US$3,860) for a third, subtracted 1.8 million won (US$1,660) from the payment for a third child to support the pension insurance policy.
- “Last year, there were 185 children born in Boeun County. We’re predicting around 30 women will receive pension insurance for having a third child in the coming year,” the county said.