[Aju Special Interview] Former Korean Pension Association President Yoon Seok-myung: "Must Transition to a Defined Contribution Pension That Pays According to Contributions" (May 27, 2025)

"Separating the old and new pension tiers is the direction that must be pursued over the long term. Once the contribution rate reaches 13% in 2033, the gradual transition to a defined contribution (DC) pension—one that pays out in proportion to contributions paid in—must be accelerated."

In an interview with the Aju Business Daily, Yoon Seok-myung, Honorary Research Fellow at the Korea Institute for Health and Social Affairs (KIHASA) and former President of the Korean Pension Association, argued that "completing the first-stage reform is a prerequisite for separating the old and new pension tiers. Given that pension benefits are severely inadequate at the current contribution rate of 9%, raising the National Pension contribution rate to a minimum of 13% is necessary before a system separating the old and new tiers can be introduced."

Fellow Yoon explained that "separating the old and new pension tiers means transitioning to a system that pays out in proportion to contributions paid in. A roadmap is needed: lay the foundation through first-stage reform, then advance the separation of old and new tiers as the second stage," adding that "as a first-stage measure, the Japanese macroeconomic slide concept—as it applies to current beneficiaries—should be introduced beginning next year, while simultaneously introducing a semi-automatic adjustment mechanism of the Finnish type for contributors. There is a need to automatically regulate the burden on both beneficiaries and contributors."

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