[Open World] The Cruel History of the Basic Pension (April 15, 2026)

(The 70% coverage threshold for the Basic Pension was set arbitrarily Other countries have narrowed or entirely abolished such programs Reform must go beyond a 'give more to those who have less' approach and reduce the eligibility threshold)

Interest in the Basic Pension has risen sharply following the President's remarks about giving more to those with less and less to those with more.

Let us begin by examining what transpired before the Basic Pension was introduced.

Upon receiving the results of the first financial projection of the National Pension in 2003, the Roh Moo-hyun administration submitted to the National Assembly a proposal featuring an income replacement rate of 50% and a contribution rate of 15.9%.

The proposal called for reducing the benefit level by 10 percentage points while raising the contribution rate from 9% to 15.9%—a reflection of the financial projection's finding that reforms of that magnitude were necessary to sustain the system.

A contentious debate followed the submission of the government's reform proposal.

"The urgent priority is not fiscal stabilization but the alleviation of elderly poverty. Therefore, a Basic Pension financed by tax revenues and paid to all elderly persons at a level equal to 20% of the A value (the economy-wide average of insured earnings) must be introduced." This was the position advanced by the opposition at the time.

To citizens unfamiliar with the operating principles of pension systems, the opposition's argument would have sounded far more persuasive.

The vast majority of pension experts who remain active to this day actively supported the opposition's Basic Pension proposal at that time.

Experts who, like the author, argued against the introduction of the Basic Pension and in favor of passing the National Pension reform bill were a small minority.

It should also be recalled that the Grand National Party and the Democratic Labor Party—both in opposition at the time—cooperated in supporting the introduction of the Basic Pension. This constitutes a highly unusual episode in the history of Korean political parties.

The Roh Moo-hyun administration, which urgently needed to pass the reform bill, proposed a compromise based on a Korea Institute for Health and Social Affairs (KIHASA) survey of near-poverty households, which indicated that roughly half of all elderly persons required government support, and offered to extend the Basic Pension to 45% of the elderly population.

However, the National Assembly passed the bill with the coverage threshold raised to 60%. More remarkably, without any implementation experience whatsoever, an amendment raising the threshold by a further 10 percentage points—to 70%—was passed just three months later under the name of the Basic Old-Age Pension.

This absurdly determined 70% threshold has continued to constrain our society ever since. The 70% figure adopted for the current supplementary budget's benefit coverage follows that same standard.

(Omitted)

At the time the Basic Pension was introduced, the author was among its most vocal opponents.

In a column published in the Seoul Sinmun on February 14, 2014, titled 'A Frank Counsel for Resolving the Basic Pension Question,' the author argued that if the Basic Pension were to be introduced regardless, the 70% eligibility provision should be placed in an implementing ordinance or regulation rather than in the statute itself, so as to allow for flexible adjustment.

The majority of experts who at that time insisted the Basic Pension was the only path forward—and who later boasted that it was thanks to their own efforts that the Basic Pension was introduced—have now abruptly reversed their positions.

Those who, until only a few years ago, championed a universal Basic Pension are now—sensing a shift in the prevailing mood—speaking of selectivity and concentration with respect to eligibility criteria and benefit levels.

Beyond the chameleon-like conduct of those who were the primary architects of the Basic Pension's introduction, there is another matter that must be remembered.

In 2014, the year the Basic Pension was introduced, the Organisation for Economic Co-operation and Development (OECD) issued a policy recommendation stating that the number of beneficiaries of the Basic Old-Age Pension—which had proven to have limited effectiveness in alleviating elderly poverty relative to the costs involved—should be reduced, with higher payments directed toward the most vulnerable elderly persons.

The problem is that this report, which should have been released at the beginning of the year, was made public later than scheduled—after the Basic Pension Act had already passed the National Assembly.

The author learned of this through a tip from an OECD official at the time.

(The print edition of the newspaper has been attached as a file.)

https://n.news.naver.com/article/081/0003635347?sid=110