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Financial Outlook

According to the actuarial estimates, the financial status of the GEPS after the 2015 reform is expected to stabilize in the mid/long-term. The dependency ratio (the ratio of the number of pensioners to that of contributors) is expected to rise from 43% in 2018 to 77% in 2060. Consequently, the deficit rates of the GEPS is estimated to increase from 3.8% to 12.6% over the same period. Nevertheless, the highest rate of pension expenditures is projected to remain within 34.5% of annual payroll (salary budget) for the government employees or 1.0% of GDP by the 2040s. In comparison to other OECD member countries, the average expenditure on government employees’ pension schemes is projected to be about 1.5% of GDP. As a result of these reforms, Korea’s projected spending is therefore set to be relatively lower.

Expected financial outlook : Year, Dependency Ratio, Expenditure Rate, Income Rate, Balance Rate, Subsidy Rate
Year Dependency Ratio Expenditure Rate Income Rate
Balance Rate
Subsidy Rate
Percentage of
Total Payroll
Percentage of GDP*
2018 42.6% 21.7% 0.8% 17.9% 82.4% 3.8%
2019 44.4% 22.3% 0.8% 18.4% 82.5% 3.9%
2020 46.4% 22.9% 0.8% 18.8% 82.1% 4.1%
2025 54.6% 28.3% 0.9% 18.2% 64.4% 10.1%
2030 61.7% 33.3% 1.0% 20.1% 60.3% 13.2%
2035 64.6% 33.8% 1.0% 20.5% 60.6% 13.3%
2040 68.0% 34.1% 1.0% 20.4% 59.7% 13.7%
2045 72.7% 34.5% 1.0% 20.5% 59.5% 14.0%
2050 74.8% 33.8% 1.0% 20.7% 61.2% 13.1%
2055 75.2% 32.9% 1.0% 20.6% 62.7% 12.3%
2060 76.9% 33.1% 1.0% 20.6% 62.1% 12.6%

Projected Flow of Major Financial Indicators

Projected Income and Expenditure Rates(2016-2060)
For information on this graph, please contact the question board.

Definition of Financial Indicators

  • Dependency Ratio: number of pension recipients at the end of the year ÷ number of incumbents at the end of the year
  • Expenditure Rate: amount of pension expenditure ÷ total amount of income
  • Income Rate: amount of pension income ÷ total amount of income
  • Balance Rate: amount of pension income ÷ amount of pension income
  • Subsidy Rate: amount of deficit of balance of pension ÷ total amount of income