[Contributed Article] Young People’s Misunderstandings About the National Pension (May 22, 2026)

(An article written from a perspective considerably different from the Pension Future Forum’s position was published as a contributed piece in Newspim.

We will make the Pension Future Forum’s position on this known soon!)

Young people’s perception of the National Pension is generally as follows. While they have little everyday interest in preparing for old age, they instinctively dislike the fact that the National Pension contribution deducted faithfully every month reduces their immediate disposable income. They also do not know exactly how much pension they will receive later, but they think that since those in need will receive more and their own share will shrink accordingly, they would be lucky just to “get back as much as I paid in.” They hope the National Pension will be sustained over the long term, but they also worry that by the time they themselves receive the National Pension — 30 to 40 years from now, around the mid-2070s — the fund could be completely depleted.

Last year the government carried out National Pension reform. Experts assess that it was for the benefit of the older generation, while for young people it only increased the contribution burden. They say last year’s National Pension reform followed a “pay more, receive more” approach. If the fund is being depleted, common sense would dictate “paying more only,” “receiving less only,” or “paying more and receiving less” — but calling “paying more and receiving more” a reform for fiscal stability is utterly hard to believe. The media, too, say that since this is nothing more than a stopgap that merely postpones fund depletion, fundamental reform must be pursued. They warn that unless the system is changed to Sweden’s “pay in, get out” reform, it could bring disaster upon young people and future generations.

These claims are far from the facts. Because of misinformation, young people harbor distrust of the National Pension, and as a result, by avoiding enrollment in the National Pension, they end up harming themselves.

Before examining the facts regarding the “pay in, get out” reform, let us briefly turn our attention elsewhere and compare our National Pension with the European countries said to be pension-advanced nations.

(Excerpt omitted)

Young people need to know these facts. According to recent reports, thanks to the success of last year’s National Pension reform and the revitalization of the domestic stock market, the National Pension fund has grown to about 1,700 trillion won. The principal from contributions paid by the public amounts to only about 550 trillion won (roughly 32%), while the remaining 1,150 trillion won (68%) is investment returns.

If the fund’s average annual investment return is maintained at around just 7% going forward, the projected timing of fund depletion would be pushed back to around the year 2100, and even a young person who is 20 today would be able to receive the National Pension with peace of mind until age 95.

There is one more point. Most of the investment returns accumulated so far were built up by the older generation. Because this sum is so enormous that it would remain even after the older generation spent it for the rest of their lives, a 20-year-old today will also be able to receive the National Pension later.

Reform must continue, but it must start from an accurate understanding of the actual situation.

Contrary to common belief, under the National Pension, people of any generation can receive more than they paid in. It is a system in which the older generation does not exploit the younger generation; on the contrary, it hands down an enormous legacy of investment returns to later generations.

Young people need to understand these circumstances well and make the most of the National Pension to their own maximum advantage.

https://m.newspim.com/news/view/20260521001400