[Kim Tae-il's Good Government] Let Us Demand a Genuine Retirement Pension Reform (February 26, 2026)

Korea's pension system is organized as a three-tier structure comprising the Basic Pension, the National Pension, and the retirement pension. The Basic Pension and the National Pension are not without their problems.

However, the most serious problem—and therefore the one most urgently and fundamentally in need of reform—is the retirement pension.

The retirement pension's greatest problem is that, belying its name, it fails entirely to function as a pension. Beneficiaries of the Basic Pension and the National Pension receive a fixed amount every month for the rest of their lives. This is the very definition of a "pension."

Yet no one actually receives the retirement pension as a pension. Ninety percent of beneficiaries take it as a lump sum. The remaining 10% receive it in installments over ten years—because doing so incurs less tax than taking the lump sum.

The purpose of the retirement pension is to provide a monthly income after retirement, in the manner of a regular salary. That the responsible authorities brazenly cling to the label "retirement pension" despite its utter failure to fulfill that purpose is a remarkable display of nerve.

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The Government Employees Pension, which the government subsidizes each year at enormous cost, and the retirement pension, which runs solely on contributions and investment returns, are in wholly different positions.

Were Korea's retirement pension to achieve the same returns as retirement pension schemes abroad, the benefit amounts would far exceed those available today, making them substantially more advantageous than a lump-sum payout.

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What is truly astonishing is that raising retirement pension benefit amounts would require no additional expenditure whatsoever.

Rather than offloading the burden of fund management onto individual participants, it would suffice to pool contributions into a single fund and have professionals manage it. Participation in the retirement pension, like the National Pension, is mandatory.

Why, then, is the National Pension managed as a pooled fund while the retirement pension alone is left to individuals to handle on their own? It is difficult to find another country besides Korea that makes participation in a retirement pension scheme mandatory and yet foists the entire burden of fund management onto individual participants.

https://n.news.naver.com/article/032/0003430067?sid=110