(Seoul Sinmun Senior Journalist Choi Kwang-suk's Column, January 2024) [Choi Kwang-suk Column] The Nation's Debt Soars as the Pension Bomb Is Passed Around (Posted October 4, 2026)

Handout policies and "no-questions-asked" legislation
Compound the surging national liabilities
Half of the nation's debt is the Government Employees and Military Pensions
The government must carry out reform that cuts into its own bones

With the general election approaching, the government's handout policies and the National Assembly's legislation are pouring out. The government is busy giving things away through tax cuts, and the National Assembly through "no-questions-asked legislation" that requires enormous budgets. National debt is already surging, and the government and the National Assembly are driving the wrong way.

National liabilities shift the burden onto future generations, yet the government and politicians behave as if they live only for today. According to the Bank for International Settlements (BIS), Korea's total debt exceeded 6,000 trillion won for the first time ever at the end of the second quarter of last year. Among the countries of the Organisation for Economic Co-operation and Development (OECD), Korea is the only one whose ratio of total debt to gross domestic product (GDP) has expanded.

National debt is the sum of household, corporate, and government debt. In Korea's case, the size and speed of the increase are steeper than in other countries. The government tightens household and corporate debt through lending regulations. But to resolve government debt, it has to regulate itself, and instead the government is growing its debt. The damage falls squarely on the public. The government's way of regulating itself is precisely the sword called "reform."

The first task in reducing national liabilities is pension reform. Surprisingly, more than half of national liabilities is the accrued pension liability that fills the deficits of the Government Employees Pension and the Military Pension. The pensions to be paid to civil servants and military personnel over the next 70 years reach 1,200 trillion won. That figure has risen by as much as 25.7% over the past five years.

People worry that the National Pension will be depleted 30–40 years from now, but the Government Employees Pension has been a "tax-eating hippo" ever since it posted its first deficit, of 6.5 billion won, back in 1993. Last year the Government Employees Pension's deficit was 4.45 trillion won, and it is projected to swell to 15 trillion won by 2093.

Because the Government Employees Pension's deficits are being filled with the public's taxes, the IMF warned that without pension reform, government debt would rise to about twice GDP 50 years from now. It said that Korea, with the hidden pitfall of low fertility and population aging as well, would fall into a swamp of low growth and high debt.

Even so, successive governments have sat on their hands, leaving the pension problem to fester until it bursts. Because it is a reform that inflicts pain, they have only been "passing the pension bomb around" so that it does not go off during their own term. The bomb can be put off for a while, but the damage grows exponentially as time passes. The case of Greece, where the pensions of high-benefit recipients were cut by 50% after reform was put off, is by no means someone else's problem.

What is the way to achieve pension reform? The most important thing is an attitude of sharing the pain. Then who should be first to share the pain? The government must stand in the very front row. Yet the Yoon Suk-yeol administration, for some unfathomable reason, says it will reform the National Pension, whose fund has not even been depleted, instead of the Government Employees Pension, the real headache. Considering the reality of the Government Employees Pension, which turned to deficit more than 30 years ago and whose deficits are being filled with the nation's tax money, the order has been reversed. The public, with a meager National Pension, is in no position even to fend for itself, let alone plan for retirement, yet the structure amounts to the public underwriting the retirement of civil servants born with "pension golden spoons."

Not long ago, Lee Bok-hyun, Governor of the Financial Supervisory Service, criticized the self-rescue plan of Taeyoung Engineering & Construction, which was facing the risk of default, as "cutting into others' bones, not its own."

I would like to return those very words to the government. The government's National Pension reform is cutting into the bones of another (the National Pension) without cutting into its own (the Government Employees Pension).

Although a rare consensus on pension reform had formed early in its term, the Yoon Suk-yeol administration merely put out a "watered-down reform plan" and passed the ball to the National Assembly. Be that as it may, now that the engine has been started, it should quickly finish National Pension reform and then move on to Government Employees Pension reform.

The direction of pension reform is ultimately "pay more, receive less, and receive later." Persuading the public for the National Pension reform now on the table matters more than anything. For that, the only way is for the government to lead by example, fixing the real headache, the Government Employees Pension, first and tightening its belt.

Senior Journalist Choi Kwang-suk

https://n.news.naver.com/article/081/0003427206?sid=110