Pension Future Forum: "Introducing an Automatic Adjustment Mechanism for the National Pension and Making Retirement Pensions Mandatory Are Necessary"

The Pension Future Forum, an academic organization that discusses sustainable pension reform, on the 16th at D Square Hall, Dongguk University, Jung-gu, Seoul, held its 8th seminar under the theme ‘Pension Reform Together with Young People’.

Yoon Seok-myung, Research Fellow Emeritus at the Korea Institute for Health and Social Affairs (KIHASA) and Leader of the Pension Future Forum, in a presentation on the theme ‘An Assessment of the National Pension Amendment Bill and a Desirable Direction for Pension Reform,’ stressed, “The National Assembly must keep its promise to the public that it would form a special committee on pension reform and carry out structural reform,” and added, “The core of this structural reform is introducing an automatic adjustment mechanism and making retirement pensions mandatory,” he said. The automatic adjustment mechanism, already adopted by roughly 70% of OECD member countries, is, in his explanation, the minimum life-support system needed to keep the National Pension and the special occupational pension schemes, such as the Government Employees Pension, viable.

Kim Jae-hyun, Professor at Sangmyung University, speaking under the title ‘The Galapagos-ization of the Retirement Pension System: A Desirable Direction for Reform’ in his topic presentation, “Retirement pensions in Korea have 83% of their 430 trillion won in reserves concentrated in bank deposits and time deposits, and their 10-year average annual return, as of last year, stood at just 2.34%,” he said, adding, “a portion of insured members' old-age income is being funneled back as financial institutions' loan-deposit margin spread, making the system Galapagos-like,” he stated. Professor Kim continued, “To achieve an income replacement rate of at least 15%, we must generate returns in the 6% range as advanced countries do,” and “we must firmly establish fiduciary responsibility and widen the scope of choice available to the insured,” he said.

https://www.seoul.co.kr/news/society/2025/07/16/20250716500177