International Monetary Fund (IMF). Screenshot from the International Monetary Fund's Twitter account.

The International Monetary Fund (IMF) has expressed agreement with the need to extend the retirement age in Korea, while also recommending structural reforms that simultaneously adjust the National Pension benefit eligibility age and overhaul the rigid wage structure.

It is unusual for the IMF to specifically address a country's retirement age issue.

According to the IMF website on the 26th, the IMF recently proposed a scenario in a special report on Korea (Healthy Aging and Labor Market Participation In Korea) to extend the retirement age from the current 60 to 65, while simultaneously raising the eligibility age for National Pension benefits to 68.

The IMF cited research from the Organisation for Economic Co-operation and Development (OECD) stating that "if the National Pension benefit eligibility age is delayed to 68 by 2035, total employment will increase by 14%, and assuming that the productivity of the elderly is maintained, gross domestic product (GDP) will increase by 12% as of 2070."

This means that the sustainability of pension finances can only be guaranteed if the extension of the retirement age and pension reform are pursued concurrently.

The IMF also advised restructuring the rigid wage system. The IMF pointed out that extending the retirement age without reforming the seniority-based wage structure to a performance-based one could lead to adverse effects.

Yonhap News