(National Assembly Public Hearing on the National Pension, January 23, 2025) [Field Check] Is Abolishing the National Pension the Answer?! … Why Voices from the Younger Generation to Older Cohorts Have Emerged

January 23, 2025

At the public hearing held by the National Assembly Health and Welfare Committee

on amending the National Pension Act,

Representative Choi Bo-yoon

put questions on the following three issues

to Committee Member Yun Suk-myung, who took part

as a witness at the time.

1. The difference between the National Pension automatic adjustment mechanism proposed by the government in September 2024 and the application of a life expectancy coefficient, the Finnish-style quasi-automatic adjustment mechanism

2. The National Pension's financial outlook if the income replacement rate, which stood at 41.5% when the hearing was held, were lowered by 11.5 percentage points to 30% and the contribution rate raised by 3 percentage points to 12% (National Pension fund depleted in 2070; a pay-as-you-go (PAYG) cost rate of 26% or more)

3. A measure to apply a higher National Pension accrual rate only to low-income contributors with a steady contribution record, to offset the unavoidable fall in pension amounts for low-income groups at or below the median if the current National Pension, which includes an income redistribution function, were converted to a 100% earnings-related pension

These three issues are crucial both to the sustainability of the pension system and to securing benefit adequacy through the National Pension.

Because speaking time was limited, the witness covered a great deal within the time allowed, so some parts may not be easy to follow, but the answers provide important information.