The Strange Debates of the Special Committee on Pension Reform's Advisory Committee

[Seoul Sinmun · Open World · June 18, 2026]

Yun Suk-myung, Research Fellow Emeritus at the Korea Institute for Health and Social Affairs (KIHASA)

The activities of the Advisory Committee to the 22nd National Assembly Special Committee on Pension Reform ended after wasting time on debates over facts while discussions on structural reform were sidelined. This was due to factual disputes regarding unfunded pension liability, the automatic adjustment mechanism, the elderly poverty rate, the ratio of pension expenditure to gross domestic product (GDP), and foreign cases of state-treasury funding. In our reality, where there are many disagreements even over basic facts, where is the starting point?

Having expanded the National Pension in a highly compressed manner over a very short period, we cannot properly diagnose inherent problems using only the indicators used by countries that have developed their systems gradually over more than 100 years. This is because we introduced the National Pension for all citizens in just 11 years, starting with workplaces of 10 or more employees in 1988. The problems that may exist in the National Pension, which started in 1988 with a 70% income replacement rate, can be understood through the Government Employees Pension.

The Government Employees Pension, introduced in 1960, was established as a system with an income replacement rate of 40% and benefits payable from age 60. Subsequently, the income replacement rate rose to 76% (for 33 years of membership), and it changed to a system where benefits are received immediately upon retirement after 20 years of service. The reason it could be changed into a system that gives more was that pension expenditure was low until the early 1990s. Despite several subsequent reforms, the accrued pension liability (the amount insufficient to pay pensions) of the Government Employees Pension is 1,052 trillion won (as of 2024), and last year's deficit subsidy reached approximately 10 trillion won. In contrast, Japan has enough money to pay pensions to civil servants even 100 years from now. How did we reach this state?

The following is the content of my presentation at the advisory committee meeting last November. "There is self-congratulation that the date of fund depletion has been extended by nine years, from 2055 to 2064, due to the National Pension overhaul passed on March 20, 2025, which raises contributions to 13% over eight years. To prevent the unfunded liability (the National Pension payment shortfall), estimated at 2,060 trillion won in 2025, from increasing further, contributions should have been raised to 21.2% immediately. Even if contributions were raised to 13% all at once rather than over eight years, the unfunded liability would surge to 6,159 trillion won (119.2% of GDP) by 2050 and increase to 42,032 trillion won (311.4% of GDP) by 2095."

A fierce debate broke out after my presentation. This was because of the claim that unfunded liability is a concept used by only a tiny minority like me in public pensions and should not be used for the National Pension. At the time, I explained that it is a concept recommended for use by international organizations such as the World Bank and provided supporting data from the U.S. Social Security system, which corresponds to our National Pension. A 2026 report recently submitted to Congress by the U.S. Social Security Administration urged prompt pension reform while specifying concrete figures for unfunded liability (Unfunded Obligation · 1.5% of GDP until 2100) and the achievement of sustainable solvency over an infinite horizon. This is a stark contrast to our situation, where the deficit subsidy for the Government Employees Pension alone will reach 0.69% of GDP by 2065.

What is our reality? In response to an advisory committee member's request for the unfunded liability of the National Pension and the Private School Teachers Pension, the answer was, "We cannot provide it because we do not calculate unfunded liability." The same answer was given during the fifth financial projection of the National Pension in 2023 and at the Advisory Committee to the 21st National Assembly Special Committee on Pension Reform. Meanwhile, the advisory committee, which was launched for discussions on structural reform, repeatedly engaged in wasteful debates and ended its activities without even starting the main game.

Data that was not provided to experts in this manner was reported to National Assembly Speaker Kim Jin-pyo of the 21st National Assembly. In the advisory committee of the 21st National Assembly, a figure of 195 trillion won for the unfunded liability of the Private School Teachers Pension was submitted at my request. However, in the 22nd National Assembly's Special Committee, the provision of that data is being refused.

A significant portion of the unnecessary debates occurring regarding pension reform stems from the government and the political sphere evading responsibility for such sensitive issues. In the meantime, reckless claims of the "say it anyway, so what if it's wrong" variety have crept in, providing a pretext for muddy debates. In our reality, where even the most basic facts are not being provided, extraordinary measures are necessary for proper pension reform.

Yun Suk-myung, Research Fellow Emeritus at the Korea Institute for Health and Social Affairs (KIHASA)

Source: Seoul Sinmun (original article)