"Gyeongnam Provincial Residents' Pension to Launch in January Next Year ... Bridging the Income Gap Before National Pension Payments"

Gyeongsangnam-do will introduce the "Gyeongnam Provincial Residents' Pension" starting January next year to support residents who experience a gap in income after retirement and before receiving the national pension.

On October 1, Gyeongsangnam-do announced the finalized plan for the Gyeongnam Provincial Residents' Pension at the provincial government press center.

Park Myungkyun, Deputy Governor for Administrative Affairs, stated, "Following discussions since the launch of the 8th popularly elected administration, Gyeongnam Provincial Residents' Pension will be implemented nationwide for the first time in January next year."

Park Myungkyun, Deputy Governor of Gyeongnam Province, is explaining the implementation plan for the "Gyeongnam Provincial Pension" to be introduced in 2026. Provided by Gyeongnam Province

The Gyeongnam Provincial Residents' Pension utilizes individual retirement pension (IRP) accounts from financial institutions to support residents during the income gap between the statutory retirement age of 60 and the start of public pension (National Pension) payments, as well as to help them prepare for old age.

Residents of Gyeongsangnam-do who are between 40 and 55 years old, and whose annual income does not exceed 93.52 million won (120% of the median income for a four-person household), are eligible to enroll.

If a participant contributes 80,000 won per month, Gyeongsangnam-do will add 20,000 won, providing up to 240,000 won per year in support for up to 10 years, totaling 2.4 million won in support.

For example, if a 50-year-old participant pays 80,000 won per month (960,000 won per year) for 10 years (120 months) into a regular deposit account with an annual compound interest rate of 2%, the total amount contributed would be 9.6 million won.

Adding the 2.4 million won in support from Gyeongsangnam-do over 10 years (240,000 won per year), the total accumulated amount would be approximately 13.02 million won.

If this 13.02 million won is withdrawn over five years (60 months) starting at age 60, the monthly pension payment would be about 217,000 won.

This example does not take into account investment gains or pension income tax during the pension payment period for the sake of calculation simplicity.

Example of Monthly Pension Amounts by Contribution Amount for Gyeongnam Provincial Residents' Pension. Provided by Gyeongnam Province

The provincial pension support is only provided for the period during which the participant maintains their resident registration address within the province. Pension payments can begin once the participant is at least 55 years old and five years have passed since the initial contribution.

Lump-sum payments are made in the following cases: when 10 years have passed since enrollment; when the participant reaches age 60; or when at least five years have passed since the first contribution and the participant is at least 55 years old and begins receiving pension payments.

Gyeongsangnam-do plans to recruit 10,000 new participants each year as the pension program begins, aiming to maintain a cumulative total of 100,000 participants after 10 years.

To prioritize those most vulnerable to income gaps, recruitment will be conducted in phases according to income brackets, allowing lower-income residents to enroll first.

For residents such as the self-employed and small business owners whose income is not fixed, support will be provided based on the annual contribution amount, even if monthly contributions are not consistent.

Additionally, to ensure the sustainability and financial stability of the program, a "Provincial Residents' Pension Fund" will be established, with system construction and manual development to be completed by the end of this year.

Previously, Gyeongsangnam-do completed preliminary consultations with the Ministry of Health and Welfare regarding the social security system and established the ordinance for the provincial residents' pension on September 30, providing a legal foundation for the introduction and operation of the pension.

The province estimates that 2.4 billion won will be allocated as support funds in the first year of the pension's launch, with the annual support fund rising to 24 billion won from the 10th year onward. This support will be equally funded by Gyeongsangnam-do and its 18 cities and counties.

Deputy Governor Park stated, "The Gyeongnam Provincial Residents' Pension is a policy that represents the minimum respect for residents who have contributed to the nation and the region by working and living in Gyeongnam, the core of the national industrial economy, throughout their lives."

He added, "In our region's labor-intensive economic structure, this proactive and bold welfare policy reflects a strong determination to attract even one more worker to Gyeongnam and to prevent population outflow."

He also said, "While the provincial pension alone may not be enough to fully address the income gap, I am confident that it will help residents prepare for their post-retirement lives and income gaps on their own."