What the National Pension Public Hearing Revealed About Our Society’s True Face

Despite this situation, the current National Pension Financial Estimation Committee and the National Assembly Special Committee on Pension Reform refused to disclose the National Pension’s cumulative deficit and unfunded liability. The reason they do not disclose the cumulative deficit figure — which is automatically produced once a financial projection is run — needs to be examined. They say disclosure is difficult because there are several methods for calculating the unfunded liability, which could cause confusion. The answer is simply to calculate it by several methods and then present the unfunded liability figure that best fits the operating principles of the National Pension.

When the estimated National Pension unfunded liability was disclosed at the seminar, criticism immediately followed that “this estimate assumes the current National Pension system is maintained as is, and so it exaggerates the crisis facing the National Pension.” This criticism is not appropriate. The reason is that unless the National Pension contribution rate — currently 9% — is more than doubled to at least 18% next year, the unfunded liability is structurally bound to keep growing. The same is true of why the reserve for benefit obligations of the Government Employees and Military Personnel pension schemes grows every year. If one accepts that it is impossible to more than double the contribution rate within a single year, then it becomes clear that this very criticism is intended to downplay the risk facing the National Pension.

https://m.hankookilbo.com/News/Read/A2023091309320001341