An Assessment of the National Pension Act Amendment Passed on March 20, 2025

If the amendment to the National Pension Act passed on March 20, 2025, were to be summarized in a single sentence,

 

"It is a change for the worse disguised as reform. To put it more bluntly, it may be characterized as a grand deception perpetrated upon the public."

 

This is because the burden on the younger generation and future generations has been increased in exchange for further entrenching the pension privileges of those aged 50 and above. To cite one example, the pay-as-you-go (PAYG) cost rate of the National Pension — that is, the annual contribution level required after the fund is depleted — stood at 36.6% prior to the reform discussions, a level already assessed as fiscally unsustainable. Yet following the restructuring of the scheme, this figure has surged to 39.4%. Should the retirement age be raised to 65 in the near future — a matter currently under debate — the PAYG cost rate would reach 41.1%, and the cumulative deficit would increase by an additional 179 trillion won.

 

What these various indicators suggest is that this constitutes a change for the worse — one that has increased the burden on future generations. If it is nonetheless judged that the label "reform" may properly be applied to this restructuring, the present speaker strongly urges that, upon conclusion of this presentation, advisory committee members raise their hands and state the grounds for such a claim. In order to adjudicate the matter, the present speaker is prepared, if necessary, to engage in unlimited all-night debate this evening. (As grounds for this forceful position, readers are referred to — currently posted on the Ministry of Health and Welfare website — the request for explanation from an expert at a Japanese government agency regarding the fact that, following the March 20 restructuring of the National Pension scheme, the PAYG cost rate has increased relative to the previous National Pension scheme. Reference is also made to the present speaker's discussant paper at the pension seminar hosted by the National Assembly Futures Institute.)

 

Even the so-called parametric reform — which addressed only contribution rates and income replacement rates — required more than a year and a half. The Government Employees Pension and the Private School Teachers' Pension — schemes facing fiscal instability far more severe than the National Pension, with a fiscal sustainability rate of 0% — would need to be restructured to achieve sustainability; the 22nd National Assembly Special Committee on Pension Reform was established to deliberate on precisely this structural reform, and the present speaker — leading today's first session of the advisory committee formed to support that endeavor — makes the following emphatic demand:

The Special Committee on Pension Reform, constituted immediately after the passage of the March 20 amendment to the National Pension Act, has to this day failed to engage in substantive deliberation!
Given that the first meeting of the advisory committee — which was formed to provide in-depth support for the Special Committee's deliberations — was convened on November 14, 2025, just before the expiration of the Special Committee's mandate, it would appear that the priority to be determined at today's meeting — before any assessment of the March 20 pension amendment — is the extension of the 22nd National Assembly Special Committee on Pension Reform's operating period by at least six months!