KOREA - Rising pension costs will deplete the Korean pension system's assets under the current parameters, International Monetary Fund (IMF) directors have warned.
In a consultation with Korea, the IMF executive board said the country's traditionally strong fiscal position would come under pressure from the ageing population.
The Korean authorities have drawn up plans to keep the debt-to-GDP ratio low by putting the pension system back on a sustainable track, and IMF directors praised the intiative, but stressed prompt action was needed, "especially on pensions".
"The longer corrective actions are delayed, the more painful the measures would ultimately need to be," they said.
The Korean government is set to reform the state pension plans for teachers, civil servants and soldiers, with a bill expected to be passed by year end.
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