In the policy report, Lee Yong-ha, a senior researcher at the National Pension Research Institute, said that the government should consider increasing the stage pension age by two years to 67.

"Most advanced nations have gradually raised the state pension age to 67 from 65 due to the deteriorating finances of their state pension schemes amid fast population aging," Lee said. "South Korea needs to take a leaf from their book."

Britain, where the state pension age for men is 65 and 60 for women, has decided to hike it to 66 for both men and women by 2020 and to 67 between 2026-28. France will also increase the age to 67 from 65 starting in 2023, according to Lee.

The proposal comes as the country's rapid population aging has sparked concerns over the state pension system's sustainability.

South Korea became an "aging society" in 2000, when the ratio of people aged 65 and older to its population topped 7 percent. The nation is projected to become an aged society in 2017 with the ratio hitting 14 percent and emerging as a super-aged society with the figure hovering above 20 percent in 2026.

South Korea adopted the state pension program in 1988 to guarantee income for the elderly after retirement and to provide coverage for disabilities and surviving family members.

There have long been forecasts of an early depletion of the national pension fund, unsettling prospective pensioners who worry about the loss of an important financial buffer that is supposed to protect them after retirement.

According to the National Pension Service, the state pension operator, the country had 21.56 million state pension program holders as of February in 2016. The NPS is the world's third-largest pension operator with assets of 545 trillion won ($476 billion) under its management, which are projected to reach 1,000 trillion won in about five years. (Yonhap)