[MK Economist] The Conditions for a Credible Pension Reform (January 28, 2026)

The reason the 2025 pension reform was disappointing is that it failed on precisely this point. That is, while raising the contribution rate from 9% to 13% and increasing the income replacement rate from 40% to 43% did somewhat reduce the actuarial imbalance, it remains insufficient to prevent fund depletion.

In a sense, the 2025 pension reform amounted to converting "a promise almost impossible to believe" into "a promise that is merely a little less impossible to believe." As such, it fell short of restoring public trust in the National Pension—particularly the trust of younger and future generations.

Further pension reform is therefore indispensable. Several key principles are important for such a reform.

First and foremost, the government must present a reform plan that is sustainable over the long term. The plan must be capable of inspiring confidence that, if implemented as proposed, the National Pension's actuarial balance will be brought into reasonable alignment. In practice, the only way to achieve such a system is for contributors to receive, on average, roughly what they have paid in. There is no such thing as a free lunch—as the axiom of economics reminds us.

Intergenerational equity is equally important. Pension reform ultimately requires either reducing the benefits promised to contributors or increasing the burdens they bear. For such reform to win broad support, the pain entailed by the reform must be distributed equitably across generations.

If the disparities in burdens across generations are large, reform will be difficult to implement and may deepen the intergenerational conflict that is already severe.

Rational, defensible standards—rather than arbitrary ones—must be established. For instance, it is worth considering the application, where feasible, of a uniform benefit-to-contribution ratio across all generations.

https://n.news.naver.com/article/009/0005628769?sid=110