(2013) [Head-to-Head Debate] Should National Pension Benefit Payments Be Guaranteed by Law?

A proposal has been put forward to eliminate public distrust by having the state guarantee National Pension benefit payments. Under current law, the obligation to pay benefits rests with the National Pension Service. The ruling party accepted this proposal, and an amendment to the National Pension Act passed the National Assembly's Health and Welfare Committee. However, the Ministry of Economy and Finance and other agencies opposed the measure, and deliberations were halted in the Legislation and Judiciary Committee. The objection was that a state guarantee would be recorded as a contingent liability, thereby undermining fiscal credibility. It was also argued that such a guarantee could impede necessary reforms—such as raising the contribution rate—needed to prevent fund depletion.

In practical terms, if the National Pension Fund were depleted, the state would have no choice but to assume responsibility for benefit payments. This holds true in every country. Nevertheless, both sides maintain that codifying this obligation in statute is an entirely different matter from leaving it uncodified. Arguments for and against were solicited from Nam Yoon-in-sun, a member of the Democratic United Party, and Yoon Seok-myung, Director of the Pension Research Center at the Korea Institute for Health and Social Affairs (KIHASA).

https://www.hankyung.com/article/2013050396651