Construction of an Integrated Long-Term Financial Projection Model for Social Security (Including the Basic Pension) (2024)

(The research findings of Dr. Lee Yeong-suk's team at the Korea Institute for Health and Social Affairs (KIHASA) on the long-term outlook for the Basic Pension are attached as a file.)

(p. 105)

The projection designates eligible recipients as the bottom 70% of persons aged 65 and older by income, and

applies two scenarios for the reference (benefit) amount: 1) adjustment in line with the consumer price index, and

2) adjustment every five years from 2026 to 11.8% of the National Pension's A value (the economy-wide average of insured earnings).

The projection is disaggregated by household type of beneficiary, National Pension receipt status, and whether the benefit is subject to reduction based on the recipient's income.

The number of Basic Pension beneficiaries is projected to rise continuously from 7,192,000 in 2025 to 13,006,000 in 2050.

Based on the 2024 reference amount of 334,810 won, if only the consumer price index is applied, the reference amount is projected to reach 564,000 won in 2050, while under the five-year periodic adjustment scenario it is projected to increase to 893,000 won in 2050.

If the current criteria are maintained, the total fiscal cost under the consumer-price-index-only scenario is projected to increase from 23.4 trillion won in 2025 to 44.4 trillion won in 2050 (1.3% of GDP), in constant prices.

Under the five-year periodic adjustment scenario for the reference amount,

the total fiscal cost is projected to increase from 23.4 trillion won in 2025 to 120.3 trillion won in 2050 (2.4% of GDP).