(SBS Biz) Hit by the Baby-Boom Generation — National Pension’s Surplus Funds Plunge by 16 Trillion Won (October 29, 2026)

The National Pension Service’s new surplus funds have fallen by nearly 16 trillion won from the end of last year. 

This is because, as the baby-boom generation born in the 1960s reaches pensionable age, expenditure is rising while contribution revenue is falling.

As a result, concerns are being raised that the capacity to pursue new projects, including welfare projects, may shrink.

According to the National Pension Service’s “Status of Welfare Project Investment,” obtained through Representative Lee So-hee of the National Assembly Health and Welfare Committee,

the National Pension’s new surplus funds stood at 40.512 trillion won as of July this year, down 15.7464 trillion won, or about 28%, from 56.2584 trillion won at the end of last year.

As surplus funds have fallen sharply, so has the capacity to put money into welfare projects. Under the Fund Management Guidelines, the National Pension Service may invest up to 1% of its new surplus funds in welfare projects.

For this reason, the National Pension’s ceiling on welfare investment fell to 405.1 billion won as of July. At present, 222.4 billion won, or 54.9% of the ceiling, is committed to the National Pension Service’s welfare projects, including 170.1 billion won in Silver Loans (emergency old-age loans).

Although surging pension expenditure has made conditions for investing in welfare projects difficult, the National Pension Service intends to keep expanding its welfare projects in the interest of the public’s old-age security.

At a recent parliamentary audit, Kim Sung-joo, Chairman of the National Pension Service, said, “Development is needed in various areas, such as senior welfare housing (senior housing), property trusts, rehabilitation, or social ventures,”

adding, “It will contribute to old-age security for the public.”

The National Pension Service is pursuing a senior welfare housing project to improve housing welfare for middle-class beneficiaries, and a second commissioned research study to assess the project’s feasibility was recently completed.

Under the Fund Management Guidelines, a project’s expected rate of return must be at least the government bond yield.

Accordingly, the second research study assumes an expected rate of return for the senior welfare housing project of 4.53%, the yield on 30-year government bonds as of the end of August last year.

The National Pension Service stated, “Senior welfare housing is a welfare project that the National Pension Service may pursue under the National Pension Act,”

and added, “The second research study does not specify a project structure and proposes various structures, including direct and indirect investment. The total project cost and whether the rate-of-return requirement will be met have not been determined.”

Some argue that welfare projects should be separated out for the fiscal stabilization of the pension.

Yun Suk-myung, Research Fellow Emeritus at the Korea Institute for Health and Social Affairs (KIHASA), pointed out, “The pension should be run so that it is sustainable,

and welfare should be carried out as a government budget program,”

adding, “The pension system and welfare policy must be kept separate.”

Reporter Lee Jeong-min ([email protected])

https://n.news.naver.com/article/374/0000540441?sid=101