Seoul Mayor Oh Se-hoon. [Provided by Seoul Metropolitan Government]
Seoul Mayor Oh Se-hoon. [Provided by Seoul Metropolitan Government]

The Seoul Metropolitan Government, which has long helped young residents build savings, is now pushing a long-term pension support program to help middle-aged residents in their 40s and 50s prepare for retirement.

The city is in talks with the Ministry of Health and Welfare to introduce what it calls the "Seoul-type sandwiched-generation pension," the Seoul Metropolitan Government said Monday.

The program would work similarly to the city's existing "Hope Double Youth Savings Account," under which the city matches whatever amount a young worker saves each month. Under the new scheme, middle-aged residents facing an income gap before they become eligible for the national pension would save a set amount each month, with the city providing matching support for up to 10 years.

The Seoul Metropolitan Government published a proposed amendment to the enforcement rules of the Seoul Metropolitan Government Ordinance on Resident Livelihood Stability Support on Thursday and is accepting public comments through Sept. 16.

The core of the amendment is extending the period during which asset-building subsidies can be paid — from the current maximum of three years at 300,000 won ($218) per month per household to a maximum of 10 years at 300,000 won per month.

The city said the revision is intended "to strengthen the policy basis for asset-building support for middle-aged Seoul residents," adding that it plans to finalize a detailed program design after completing consultations with the Ministry of Health and Welfare and securing a budget.

Under the existing Hope Double Youth Savings Account, the city's flagship asset-building program, a working young person who saves 150,000 won a month receives an equal amount from the city. A participant who saves for two years can accumulate 7.2 million won in principal; saving for three years yields 10.8 million won.

The city has concluded that a two-to-three-year lump-sum savings model alone is insufficient for middle-aged residents to build an adequate retirement fund, and plans to extend the matching support period to as long as 10 years.

The initiative gives concrete form to a campaign pledge Seoul Mayor Oh Se-hoon made during the June 3 local elections — the "Seoul-type sandwiched-generation pension."

Oh pledged at the time to support 200,000 retirement-vulnerable residents, modeling the program on South Gyeongsang Province's individual retirement pension-style "South Gyeongsang Provincial Pension." Under the original pledge, a participant who saves 80,000 won a month for 10 years would receive an additional 20,000 won per month from the city. Including investment returns, the projected maximum payout at maturity would reach 16.4 million won, distributed in installments like a pension for a set period just before participants turn 65 and begin receiving the national pension.

Details including the eligible age range, income and asset thresholds, the city's matching contribution amount, and the total enrollment size have yet to be finalized.


betterj@heraldcorp.com