(Professor Seok Jae-eun's Kookmin Ilbo Op-Ed, Published September 8, 2026) [Op-Ed] The Basic Pension Overhaul Plan's Opening Move Toward Structural Reform (Posted September 8, 2026)

(This is Professor Seok Jae-eun's op-ed,

which develops an argument that,

from the Pension Future Forum's standpoint,

is exceedingly hard

to understand.)

The government has put forward its 2027 Basic Pension overhaul plan. At first glance the changes are not large. The current eligibility scope (the target take-up rate), under which the pension is paid to the lower-to-middle 70% of older people by income, is itself unchanged. The bottom 30% would receive 380,000 won a month, 30,000 won more; the 30–45% band would be raised to reflect the inflation rate; and the 45–70% band would hold at the current benefit level. There is also an easing of the couples’ reduction for low-income groups and an extension of payment to some low-income beneficiaries of the special occupational pension schemes (the Government Employees, Military Personnel and Private School Teachers pension schemes). From a beneficiary's standpoint, it amounts on the whole to "maintaining the status quo plus alpha."

Yet it is hard to say that this is not reform. The government has not said as much, but in this overhaul one can read the opening placement for a structural realignment — for how the Basic Pension is to be changed over the long term. A shift in the function of the Basic Pension is unavoidable. In the period when the National Pension was immature, the Basic Pension filled coverage gaps in the public pensions and responded to elderly poverty. But under the relative method of determining eligibility that the "lower-to-middle 70%" represents, the threshold rises along with any improvement in older people's economic circumstances. The eligibility threshold, which in 2015 stood at a little over 50% of the standard median income, has now passed 90%. As the baby-boom generation enters old age, income disparities within the older population will widen further, and given ultra-super-aging, the Basic Pension must concentrate on alleviating poverty among the groups whose old-age income is inadequate and develop into a minimum income guarantee and a supplementary pension. What must be kept distinct, however, is the direction of the shift in function and the pace at which it is carried out. The National Pension is still in the process of maturing — so much so that at the end of 2025 only 21% of old-age pension beneficiaries had a contribution period of 20 years or more. The Basic Pension as it now stands still needs, alongside its response to poverty, a transitional function that supplements the immature National Pension. The direction of reform should be made clear, but the pace must be matched to the maturity of the National Pension.

In this respect, this overhaul plan carries all the more significance. Rather than narrowing the eligibility scope immediately, the government set a different benefit path for each group: an additional increase for the bottom 30%, price indexation for the 30–45% band, and a freeze on the nominal amount for the 45–70% band. No one's benefit is cut immediately, but as time passes real benefits will diverge from group to group. If the current 350,000 won in the 45–70% band is frozen for 20 years, then assuming an average annual inflation rate of 2.5%, its present value falls to about 210,000 won. What matters, then, is not the "30,000-won increase" but the "30-45-70 structure" itself. It cannot be declared a settled roadmap, but it is clear that a framework for a division of roles is now in place: a minimum income guarantee for low-income groups, supplementation of the National Pension shortfall for middle-income groups, and a gradual reduction of the Basic Pension's role for high-income groups.

The direction that has hitherto been raised as the "clear-cut" one for Basic Pension reform was to replace the relative-ranking method (the bottom 70%) with a method linked to the standard median income and to abolish the very framework of a 70% target take-up rate. This overhaul, however, has not touched that formal switch of criterion. Instead, by applying different benefit paths to three groups within the 70%, it has in effect built in — with no declaration that the criterion is changing — a "more for the lower, less for the upper" structure in which benefits become more generous for the low-income group and less generous for the high-income group: that is, the same redistributive effect as a switch of criterion. At a stage when the National Pension has matured further, this structure could serve as a foothold leading on to a formal switch of the target take-up rate and the eligibility criteria as well. Seen from the standpoint of policy reform, this may well be called a sequential, quiet reform, one that has adjusted only the pace and the order while minimizing the shock that current beneficiaries have to absorb.

On the fiscal side, of course, an assessment that the plan falls short is also possible. Maintaining the eligibility scope while raising benefits for low-income groups and easing the couples’ reduction produces no short-term fiscal saving; on the contrary, the fiscal requirement increases. The assessment changes, however, if the goal of a first-stage reform is placed not in cutting expenditure but in concentrating financial resources and laying the foundation for a long-term shift in function. This overhaul is not a completed reform but a first stage. What matters is to move the system in the direction it needs to go while minimizing the policy losers. Direction clear, transition quiet. This Basic Pension overhaul deserves to be assessed as a reform of that kind.

Seok Jae-eun, Professor in the Division of Social Welfare at Hallym University

https://n.news.naver.com/article/005/0001871500?sid=110