(Pension Future Forum Commentary. Put Forward Feasible Alternatives) [Public Forum] Pension Reform: Social Consensus Before Fiscal Mechanisms (Posted October 12, 2026)

(In the Republic of Korea, when it comes to thorny problems,

people say

they should be solved through social consensus.

What the grand slogan of social consensus

has produced

has, in most cases, been

'strong against the weak and weak against the strong' —

that is, pension overhauls "hard on the socially weak

and soft on the strong."

The 2015 Government Employees Pension overhaul

shifted most of the pain

onto junior civil servants.

The 2024 National Pension Public Deliberation Committee

was run with data distortion bordering

on the criminal and with its procedural legitimacy

lost,

and so it, too,

brought about a 'weak against the strong and strong against the weak'

pension deterioration.

That is because, in exchange for entrenching the pension vested interests

of those aged 50 and over,

it only added to the burden on future generations.

In a society that has thus lost its capacity to cleanse itself,

even talking about social consensus

seems absurd.)

In a society whose self-purifying function has vanished,

the best solution (even if it does not lead to reform outcomes right away)

will be to properly inform the public and the press of the Facts.

For even if the mainstream press does not report them properly, "once the point is reached where Facts that cannot but provoke public outrage are overflowing," they can become the greatest source of momentum for pushing reform in the right direction.

We have two questions about Professor Seok Jae-eun's column, attached below.

(Before the Pension Future Forum's two questions, there is one matter that should be shared. It is the answer given by an official who attended the 2024 OECD Pension Experts Meeting on behalf of the OECD Secretariat to the question then put by Committee Member Yun Suk-myung — whether Korea needs to introduce an automatic adjustment mechanism.

The official "looked around, hesitated for a moment, and then said that an automatic adjustment mechanism should be introduced as soon as possible.")

1. Why! Must the National Pension hold fast to one pension per person? Is it because it is called the National Pension? Why! Must a full-time homemaker who is not economically active necessarily become insured under the National Pension? If the National Pension — written "National pension" in English — is understood as 'a public pension run by the state', do you think one could still argue, even then, that every citizen needs one National Pension per person?

The following is part of the column.

"Introducing an automatic adjustment mechanism is also premature. When the pensions to be paid in the future exceed the resources, Sweden's automatic balancing mechanism automatically lowers the rate at which contributors' account balances and beneficiaries' pensions rise. In fact, right after the financial crisis, even pensions already being paid were cut. Finland's life expectancy coefficient lowers the pension amounts of new beneficiaries as life expectancy rises. The loss can be made up by claiming later, but that is a hard choice for people whose health and employment conditions are unfavorable. Both mechanisms make up for fiscal imbalances by cutting pensions."

(Excerpt omitted)

What, then, should we agree on? First, a floor on protection. The current income replacement rate (43%) should be maintained, and every generation should be guaranteed to get back at least what it paid in (a generational benefit-to-contribution ratio of 1.0 or higher). Second, a ceiling on the burden. The contribution rate for future generations should be held below the level at which people pay contributions equal to the pension they will receive (the contribution rate that balances contributions and benefits). The difference is made up by fund investment returns. That is why the fund must be protected.

(Excerpt omitted)

'One National Pension per person' should be realized through reform of the coverage structure and pension credits, and adjustment of the eligibility age should be pursued in stages together with employment extension."

1. Without even a minimal automatic adjustment mechanism, the 2025 National Pension deterioration raised contributions to 13% — and over eight years at that — while raising the National Pension income replacement rate by 7.5% (3 percentage points) at once. Do you believe it can be made to work with nothing more than the management of a 1,600 trillion won fund!

At the time of the fifth National Pension financial projection in 2023, the National Pension Fund was already exposed to the risk of a loss once every four years, even under an assumed investment return of 4.5%. Raising the expected rate of investment return means that the cycle of losses can shorten accordingly.

If such a loss came at a time like the 1997 financial crisis or the 2008 global financial crisis, about 30% of the reserves could vanish in a single year.

Do you think that managing the people's retirement savings while exposing them to such excessive risk is consistent with the National Pension's principle of stability!

Now let us come back to reality.

According to the fifth National Pension financial projection in 2023,

even if the National Pension income replacement rate were fixed at 40%,

the National Pension contribution rate doubled to 18%, and the National Pension eligibility age extended by three years from 65 to 68, long-term fiscal stability for the National Pension would still be impossible to achieve.

Yet can fiscal stability for the National Pension be achieved simply by managing the fund well, while the income replacement rate is raised to 43% and contributions are raised only to 13% over eight years?

Let us take one more example.

This, too, is a result of the fifth National Pension financial projection. Even if the National Pension income replacement rate were lowered to 30% — 13 percentage points (30.2%) below the current level — and contributions raised by 3 percentage points to 12%, the National Pension would still be depleted around 2070.

This is the actual state our National Pension is in.

Alternatives must be put forward on the basis of this reality.

The column in question is attached.

https://n.news.naver.com/article/005/0001878006?sid=110