"The Burden Must Not Be Passed Entirely to Future Generations" — Calls Grow for Introducing a 'New Pension' (May 2024)
- #연금특위
Shin Seung-ryong, a Research Fellow at the Korea Development Institute (KDI), argued that the current system—premised on coexistence across generations—cannot avoid fund depletion. He further noted that discussions have been confined to adjustments of the contribution rate and the income replacement rate, and emphasized that "future parametric reform deliberations must first presuppose the separation of a 'new pension.'"
Shin's proposal is to apply a fully funded system to future National Pension contributors, under which participants would receive back only the amount corresponding to their own contributions plus the investment returns on the accumulated fund. He argued that the current pension system—based on intergenerational solidarity, whereby the contributions of the next generation cover the benefits of the previous one—is not sustainable.
His proposal seeks to quell the controversy over intergenerational equity by shifting to a model in which individuals receive what they themselves have paid in. He also emphasized that the "old pension"—which carries benefit obligations already promised to existing generations—can be resolved by injecting 609 trillion won in government fiscal resources.
