| 4. In which ways is the initiative creative and innovative?
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- Since this plan is the world’s first pension plan, there were no precedents about operation methods, demanding forecasting. we are concerned about how to executing and implementing.
- If Financial institutions is operating farmland pension plan, they could concern the risks about rising interest rates, life expectancy, and the longevity of the contractor until the loan is paid by contractor . Therefore they were reluctant to handle the plan
- Utilizing Farmland management fund(one of government funds) to be determined to finance the pension plan by form of borrowing, professional farmland management public organizations, Korea Rural Community Corporation(KRC) to implement projects
- The implementation of the strategy to expand into three stages
1) Stage 1 : Analysing of Environment (year 2006 ~2008)
Prior to full-scale review of the farmland pension, reviewed all of reasons to start the plan.
Finally concluded the plan was very necessary to establish for elderly farmers. At this stage, expert consultation was held several times and organized Project Task Force team in KRC that studied various matters such as demand forecasting and methods of implementation.
2) Stage 2 : Review of introduction (year 2009 ~2010)
Prior to project implementation, preceded pension model design, funding and revised law of Korea Rural Community Corporation and Farmland Management Fund
3) stage 2 : Implementation of project(year 2011 ~2013)
As well as performed in the the world's first farmland pension plan, curtailed subscription costs necessary to make contract and property tax for subscribers to give more benefits. In addition, evaluated the adequacy and reliability of business operations and farmland pension model also monitoring consecutively.
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| 5. Who implemented the initiative and what is the size of the population affected by this initiative?
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1) Elderly farmer : Getting an annuity as much as possible within Collateral value of agricultural land and desiring a debt to a minimum
2) Government: Due to the nature of the long-term plan, designed the pension model in view of the conservatism to prevent financial loss in consideration of lower interest rates, declining collateral values, longer living than expected
3) KRC: In the position of the agent of government and helper for elderly farmers
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| 6. How was the strategy implemented and what resources were mobilized?
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- "Farmland Management Fund” for pension plan created a stable funding available so that subscribers to be given the incentives to join
(Farmland Management Fund is for adequacy of scale, aggregation funded by the government)
- KRC which is expertised in many years of experience about agriculture and farmland could provide a one-stop service like advertising, counseling, applying, contracting a pension. Since KRC has 93 branches all around the country , elderly farmer could have the advantage of face-to-face counseling, applying.
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| 7. Who were the stakeholders involved in the design of the initiative and in its implementation?
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- In 2011, the first year of project implemention achieved the goal of 911 pension subscribers successfully that is 182% over than planned. Second year of 2012, achieved the goal attainment in excess of 1,291 pension subscribers, the average monthly pension payments as of end-2012, this was a 810 dollar almost 90% of the minimum cost of living in Korea (year 2012 basis)
The result showed us that Farmland pension plan supports the livelihoods of elderly farmers solidly
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| 8. What were the most successful outputs and why was the initiative effective?
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1) Farmland Pension subscriber satisfaction survey
Satisfaction survey annually to the pension system and used for improving and developing Farmland Pension plan
2) Risk assessment by specialist
Assessment risks as interest rate, agricultural price, expected life, termination rate of contract by specialist aiding to maximize annuity and to prevent loss of government fund
3) Examining and analyzing at every cancellation
Examining and analyzing the reasons about subscriber termination of agreements at every cancellation
4)Operating professional web site of pension plan
operating professional farmland pension sites separately
making familiar with the potential subscriber to allow access through the questions and answers
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| 9. What were the main obstacles encountered and how were they overcome?
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- Farmers misunderstanding : government would be taken away owned farmland when applying the pension plan
- Government : the pension fund's financial stability in long-term basis
- Overcome
1) Promotion to Farmers actively : visiting the rural town hall and the marketplace of farmers residing to explain the pension system.
2) Government: prepared farmland pension model to preserve loss of government fund
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