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Past Flows of Plan Fund and Investment In 2017

According to the Government Employees Pension Act, the Government Employees Pension Fund is a liability reserve for annuities such as retirement pension, survivors’ pension and disability pension. The pension fund is comprised of the plan’s contributions and investment income. In the initial stage of the plan’s implementation, pension contribution exceeded pension expenditure and, accordingly, the size of the pension fund continued to increase. However, the fund began to decrease in 1995 when the plan ran into deficit for the first time in its history. This is mainly due to aging beneficiary group and large-scale layoffs in the public sector during the Asian economic crisis (1997~1999). Over the two-year crisis, the fund rapidly contracted from 6.2 trillion won in 1997 to 1.8 trillion won at the end of 2000. Faced with serious financial instability, the government conducted a major reform in 2000. One of the reforms implemented was to subsidize pension deficits with the governments general budget. In the following months the plan transformed into a pay-as-you-go (PAYGO) system, using a small sum of the contingency fund. Contributed by the funds’ investment income, the reserve has steadily recovered its size and stood at 10 trillion-951 billion won as of the end of 2017.

Past Flows of the Financial Status and Plan Fund

(Unit: 100 million of won, As of the end of December, 2017)
Past Flows of the Financial Status and Plan Fund
Year Financial Status* Investment Income Net Assets End of Year
Income Expenditure Balance
1981         5,491
1982 2,684 1,611 1,073 1,140 7,704
1984 3,673 1,841 1,832 1,461 14,672
1986 3,931 2,897 1,034 2,087 20,951
1988 5,418 4,596 822 2,641 27,893
1990 7,898 7,236 662 3,345 35,786
1992 12,767 12,095 672 3,810 44,918
1994 17,520 19,351 △1,831 5,242 52,414
1996 24,760 24,321 439 4,871 56,805
1998 33,164 50,698 △17,534 3,363 47,844
2000 34,374 43,832 △9,458 920 17,752
2002 39,512 35,736 3,776 2,604 27,276
2004 49,264 49,264 - 2,543 33,218
2006 61,775 61,775 - 3,934 42,229
2008 78,293 78,293 - △1,182 46,861
2010 84,232 84,232 - 6,434 58,307
2011 89,391 89,391 - 1,798 60,105
2012 103,520 103,520 - 3,471 63,576
2013 107,624 107,624 - 20,094 83,670
2014 125,417 125,417 - 1,602 85,272
2015 136,769 136,769 - 2,270 87,542
2016 140,203 140,203 - 15,669 103,211
2017 148,820 148,820 - 6,295 109,506
* Fund balance includes retirement allowance, excludes injury compensation and relief benefit

Investments by sector in 2017 are as follows: the pension fund assets of 17 trillion 756 billion won consist of 8 trillion 74 billion won (45.5%) in the financial sector, 1 trillion 431 billion won (8.1%) in pension loan, 3 trillion 239. 3 billion won (18.2%) in student loan, 4 trillion 571 billion won (25.7%) in housing facilities, and 430 billion won (2.4%) in other outstanding receivables.

Investment of the Plan Fund by Sector

(Unit: 100 million of won, As of the end of December 2017)
Investment of the Plan Fund by Sector
Classification Financial Sector Pension Loan Student Loan Housing Outstanding charges etc. Public Sector Total
Amount  80,743 14,313 32,386 45,712 5,554 100 177,557
  • Financial investment : 8trillion 74.3billion
  • pension loan : 1trillion431.3billion
  • student loan : 3trillion238.6billion
  • housing & facilities : 4trillion 571.2billion
  • uncollected contributions : 555.4billion
  • public areas : 10.0billion