The income of elderly people compared to the average household’s in South Korea ranked second lowest in major economies, a report showed Tuesday, indicating that the country’s public pension system remains relatively insufficient to support retirees.

The report by the National Pension Service (NPS) analyzed the Organization for Economic Cooperation and Development’s (OECD) data of 2010 income inequality and found that the income of Korean senior citizens stayed at 66.7 percent of the average household income.

The ratio placed 29th among the 30 counties and the only nation that had a lower figure than Korea was Ireland with 65.9 percent. Mexico dominated the top of the list with 97.1 percent, making a 2.9 percent gap between seniors’ income and average households’ followed by Austria (96.6 percent), Luxembourg (96 percent) and Poland (94.7 percent).

Japan, one of the fast-aging countries in the world, reached a significantly higher rate than Korea with 86.6 percent.

The NPS researcher who led the study, Suk Sang-hoon, pointed out that Korea’s public pension scheme that plays a crucial role as a social safety net to secure income after retirement is still in its early stage resulting in senior citizens’ low income level.

According to the report, French elderly earn a relatively high income and the majority of the money comes from public transfer income and only 4.6 percent is from salary income.

While the ratio of salary income took up 21.4 percent on average of OECD nations, Korea hit the highest as 2.7 times the figure.

“Korean seniors continue working (after retirement) because there are not many public pension recipients and the total amount received is not much,” Suk said.

He added that ratio of capital income including private pension and savings reached 26.4 percent which surpasses the OECD average of 19.1 percent.

(hnpark@heraldcorp.com)