[Exclusive] The 'Bottomless Pit' of the Government Employees Pension: Set to Consume 0.7% of South Korea's GDP by 2065 (April 28, 2026)

(Deficit subsidy to reach 23.8 trillion won in 40 years — 2.7 times last year's figure A fiscal black hole expanding year by year Accrued pension liability at 1,052 trillion won … a 'debt' the public will bear)

Analysis indicates that by 2065, 0.7% of the total wealth produced by South Korea in a single year will be consumed by the deficit in the Government Employees Pension.

It is projected that the net deficit subsidy — disbursed solely to cover the pension shortfall, separate from the statutory employer contributions the government bears as the employing authority — will surge to 0.69% of gross domestic product (GDP).

As the working-age population contracts while pension obligations expand, a "fiscal black hole" that erodes the welfare resources available to future generations is becoming a reality, analysts warn.

According to the "Long-Term Financial Projection Report on the Government Employees Pension" issued by the Pension Research Institute under the Government Employees Pension Service, obtained by the Seoul Sinmun on April 28,

the deficit subsidy as a share of GDP is projected to more than double, rising from 0.33% in 2025 to 0.69% in 2065.

This amount is disbursed entirely to cover the shortfall and is separate from the 9% employer contribution rate the government is obligated to bear.

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Experts point out that even this projection leans toward optimism.

Yoon Seok-myung, Honorary Research Fellow at the Korea Institute for Health and Social Affairs (KIHASA), emphasized that "given the trend in which the 2025 subsidy alone has already increased by more than 1 trillion won compared with the previous year, the actual fiscal situation is likely to deteriorate far more severely than these projections suggest."

The fundamental problem is that the deficit subsidy constitutes "inflexible mandatory expenditure" that the government has little discretionary authority to reduce.

As expenditure grows and other fiscal space shrinks, a zero-sum competition among welfare expenditure programs becomes unavoidable.

The accrued pension liability — the present value of pension benefits owed to civil servants in the future — already stands at 1,052.3 trillion won as of fiscal year 2024. This represents a "future debt" that the public will ultimately be required to absorb in its entirety.

Despite this mounting fiscal pressure, the National Assembly Special Committee on Pension Reform has not even placed the reform of occupational pensions — including the Government Employees Pension, the Private School Employees Pension, and the Military Pension — on its agenda.

Yoon stated that "now, when tax revenues are rising on the back of the semiconductor cycle, is precisely the time to manage liabilities and mandatory expenditure," adding that

"reforming the National Pension alone while turning a blind eye to occupational pension reform is nothing more than a stopgap that tries to quietly slip past the problem rather than confront it."

https://n.news.naver.com/article/081/0003639433?sid=102