This study examined if total sums of the national public pension and the
retirement pension paid after laborers’ retiring can afford their after-retirement
income estimates calculated based on the consumption expended during their
working periods. In this context, our study might be different from the other
studies which focused on analyzing a simple income replacement ratio. The
asset adequacy ratio, which is defined as the ratio of total sums of the national
public pension and the retirement pension paid after the laborers’ retiring to
the necessary income after-retirement, is calculated at 59.97 percent on
average. These measures say the following implications: first, the national
public pension and the retirement pension can secure the necessary income
after-retirement adequately; second, some laborers in the blind spots of the
national public pension and the retirement pension schemes cannot afford the
basic and more adequate consumption after retirement. Also, we calculated the
asset adequacy ratio again by minimum living expenses instead of total sums
of two pensions and the ratios are over 100 percents in all cases, and it can be found that low-income classes can afford the basic consumption with only
two pensions, from the point of the income earned during their working days.
In conclusion, our empirical results imply that the sufficient “necessary income
after-retirement” requires the two pension systems: a private effort for the
income security after-retirement and the institutional incentives to stimulate the
private exertion.