Agricultural Land Pension, 1 in 3 Ends Early... "Need to Develop Activation Measures"

Kim Young-jin, Democratic Party Lawmaker: "Farmland Pension, a Useful Retirement Income Source for Elderly Farmers"

[Sejong=Asia Economy Reporter Kim Hyunjung] It has been revealed that the early termination rate of the "Farmland Pension," which provides livelihood stabilization funds like a pension by using farmland as collateral for elderly farmers, reaches 32.5%.

According to data on the status of Farmland Pension subscriptions over the past five years submitted by the Korea Rural Community Corporation to Kim Youngjin, a member of the National Assembly's Agriculture, Forestry, Livestock, Food, and Maritime Affairs Committee from the Democratic Party of Korea, the number of new Farmland Pension subscribers increased nearly threefold from 1,243 in 2015 to 3,209 in 2019. Consequently, the cumulative number of subscribers has steadily increased, reaching 16,654 as of last August.

However, considering that the Farmland Pension system has been in operation since 2011 and is now in its 10th year, the cumulative subscription rate is only about 3% of approximately 480,000 elderly farmers, which remains relatively low.

In particular, the early termination rate has more than doubled over the past five years, increasing from 469 cases to 957 cases, maintaining a high annual rate of around 32%. The most common reason for termination was farmland sale at 26.4%, followed by opposition from children at 17.8%, and death of the beneficiary at 17.1%. As a result, the actual cumulative subscription rate of those maintaining the pension is very low, at about 2.35%.

The Farmland Pension offers five products: lifetime fixed amount type, fixed period type, the before-and-after type added in 2017, lump-sum withdrawal type, and management transfer type. Among the 12,691 new subscriptions over the past five years, the fixed period type accounts for 6,301 cases (49.7%), nearly half, with the highest average monthly payment of approximately 1,028,000 KRW. Next is the lifetime payment type with 3,735 cases (29.4%), paying about 877,000 KRW monthly. The lump-sum withdrawal type accounts for 1,682 cases (13.3%) with the lowest payment of about 790,000 KRW, but allows occasional withdrawals within 30% of the total payable amount.

Assemblyman Kim Youngjin pointed out, "The Farmland Pension is a very useful means to provide stable retirement life for elderly farmers whose farmland is a fixed asset," but added, "However, the number of subscribers is still very low, and the early termination rate is high." He continued, "To expand the number of subscribers and realize the purpose of securing retirement income, measures to revitalize the system should be prepared, such as improving the lifetime product and increasing the pension retention rate."

This content was produced with the assistance of AI translation services.