Korea’s National Pension Service (NPS) is under fire for poor management of taxpayers’ money after it was found to have provided pensions worth $51.3 million to unqualified people between 2009 and June this year

2013-08-13 16:42

NPS hit for mismanaging pensions

By Yi Whan-woo
The National Pension Service (NPS) is under fire for poor management of taxpayers’ money after it was found to have provided pensions worth 57.2 billion won ($51.3 million) to unqualified people between 2009 and June this year. According to data released by Shin Yee-jin of the ruling Saenuri Party, the country’s pension fund operator supplied that amount of pension to people not entitled to that money, including missing persons and the dead.Of the 83,180 cases reported, 3,662 of them are related to scams in the survivors’ pension programs. It allows monthly pension to the surviving family members such as spouses, children and parents of a deceased contributor.
Some 11,651 other cases are related to the elderly pension that is paid to senior citizens. Even after they pass away, their family members deliberately refrain from reporting their deaths, thus making illicit gains worth 8.58 billion won.
The NPS has tried to retrieve the money but the outstanding amount remains at 4.49 billion won.
“The government should overhaul the pension system to prevent unqualified people from receiving pension benefits,” Shin said.
“It should collaborate with heath insurance service agencies to check the status of the recipients on a regular basis and make sure whether they are qualified to receive the pension.”
The lawmaker’s disclosure came after a rising concern over flaws in the pension system. It is speculated that future generations will pay more pension premiums but receive fewer benefits than their parents or grandparents before 2059 when the fund is anticipated to be depleted due to aging demographics and falling working age population.
Shin said the data was compiled by the NPS to figure out and retrieve the amount of payments involved in the pension benefit fraud cases.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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