[Open World] A Spectator’s Verdict on the 22nd National Assembly’s Special Committee on Pension Reform (2026.08.25.)

A Special Committee at Odds with the Purpose of National Pension Reform
Criticism, too, of the damage done to the rebalancing principle
Fund returns and the like call for a conservative approach

On August 21 the plenary meeting of the National Assembly’s Special Committee on Pension Reform was held. It was expected — but who would have thought it would come to this! After a free-for-all debate at the tenth and final meeting, the content agreed with such difficulty for the advisory committee’s report was unilaterally scrapped by one side.

As a result, without even an outcome report containing the substance of the ten meetings of the advisory committee, which concluded last May, the co-chairs of the advisory committee merely stated their respective positions.

After the reports from the government ministries that followed, Representative Ahn Sang-hoon, the Special Committee’s opposition secretary, delivered a rebuke. That was the context for the remark asking whether they were playing “bed football,” in response to a government report of “needing review, or continuing the discussion,” delivered without the reform proposal the National Assembly’s Special Committee had demanded on several occasions.

Contrary to politicians’ claim that they have reformed the National Pension, the assessment of the expert community is that “the essence of last year’s amendment of the National Pension Act was to pile still more of the burden onto the young and future generations in order to strengthen the pension vested interests of those aged 50 and over.”

The 22nd National Assembly’s Special Committee on Pension Reform was launched in order to answer, through structural reform of the pension, the social demand to “resolve the anger of the younger generation, who share that assessment.”

Even so, some members’ questions were enough to make one click one’s tongue. They poured out remarks at odds with the very purpose of the Special Committee, which had set out to overhaul a National Pension structure changed for the worse in favor of earlier generations at the expense of future generations, who have no vote.

They chiefly stressed that “if the assumed rate of return on National Pension fund investments is changed, the point of fund depletion is greatly extended,” and pressed for “various credits requiring heavy tax spending and an expansion of Basic Pension payments.” In a forum created to overhaul an unsustainable National Pension, all one heard was talk of spending still more tax money and the same old refrain of raising the assumed rate of return on fund investment.

Since the government’s report was hollow, the opposition members’ line of attack converged on the National Pension rebalancing issue. Representative Woo Jae-jun, who claims to represent the young, put it this way: “In 2021 there was a great deal of controversy over changing the domestic equity allocation by even 1 percentage point. This time it was raised by 6.4 percentage points, and taking the strategic and tactical allowances into account, the allocation to domestic equity investment has been more than doubled — was there no political pressure?” The question was pressed while displaying past remarks by senior figures of the current government from the fund committee minutes.

The National Pension did not observe the rebalancing principle that any investor of a giant fund plainly ought to have kept. By contrast, the Government Employees Pension, the Private School Teachers Pension and the Korea Workers’ Compensation and Welfare Service’s “Blue Seed” adjusted their equity allocations at the market peak and realized their valuation gains. In this stock market rise foreigners took 1,200 trillion won in market gains, of which they sold more than 157 trillion won.

With 65% of the losses on leveraged products — permitted just before the local elections and having magnified share price volatility — falling on young people aged 35 or under, and with a ruling party member’s remark that “let us convert scrapped buses into housing for the young; let us take 1% of the National Pension Fund and build public housing” having pushed young people’s anger past its threshold, raising the rebalancing issue can be seen as only natural.

That is presumably why Representative Kim Yong-tae, who also speaks for the young, rebuked a government indifferent to structural reform and said there was no way to face young people.

We should also remember that remarks by National Pension Service officials — that if only the National Pension Fund is managed well there will be no fear of depletion until 2100 — have weakened the momentum for structural reform.

If there was any achievement at all, it was the question from Special Committee Chairman Yoon Young-seok: “I believe that the assumptions concerning the returns and projections of the National Pension Fund, which is responsible for the public’s old age, must be approached conservatively — what is the Minister of Health and Welfare’s position?” It drew from Minister Jung Eun-kyeong the agreement that “on the National Pension question we must take a conservative approach.”

At this point a remark by Representative Chun Jae-hee from some 25 years ago came to mind. When a majority of the experts speaking for the Grand National Party, Representative Chun’s party, argued for introducing a universal, tax-financed basic pension, this is what Representative Chun said to the author, who alone opposed it strongly at the time: “You are right. Those involved in government policy must approach matters conservatively, as you do, Doctor. We must be wary of idealistic approaches.”

That is why the content of the Lee Jae-myung government’s Basic Pension reform, to be unveiled before long, deserves close attention.

Yoon Seok-myung, Research Fellow Emeritus at the Korea Institute for Health and Social Affairs