"Introduction of an Automatic Adjustment Mechanism for the National Pension Is Premature — the System Is Failing to Adequately Secure Old-Age Income" (Comprehensive) (January 23, 2025)

Yoon Seok-myeong, Honorary Research Fellow at the Korea Institute for Health and Social Affairs (KIHASA) and classified as a proponent of fiscal stabilization, stated that "the International Monetary Fund (IMF) has analyzed that even if the National Pension's income replacement rate is maintained at 40%, the contribution rate must be raised from the current 9% to 22.8% to prevent further increases in national debt," and emphasized that "at minimum, a proposal capable of sustaining the system is necessary."

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Professor Ju likewise assessed that "when price indexation is factored in, a lifetime benefit reduction effect of approximately 15% or more generally results," characterizing the measure as "excessively premature."

Committee Chair Oh remarked that "the automatic adjustment mechanism is not a bad system in itself," but added that "Korea's fiscal imbalance is too severe—if the automatic adjustment mechanism were introduced, a decline in benefits would be unavoidable—and it is therefore premature."

However, Research Fellow Yoon countered that "the automatic stabilizer would have the effect of raising the contribution rate by 2 percentage points," and argued that "fiscal stability must be achieved through this mechanism."

https://www.yna.co.kr/view/AKR20250123108651530

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