WNAM REPORT: President Yoon Suk Yeol said Thursday that the government will pursue gradually increasing the pension premiums for the younger generation and the middle-aged generation at a different pace, as well as introduce mechanisms to enhance the pension system’s financial stability.
Yoon outlined a set of reform measures during a policy briefing as South Korea grapples with the rapid depletion of its pension fund due to an aging population and declining birth rate.
“The government should codify the guarantee of national pension payments into law to assure young people that they will receive their pensions,” Yoon said in a televised address.
The state-run National Pension Service said earlier that the fund is forecast to be depleted in 2055 after posting its first shortfall in 2041.
Yoon pledged to adjust the contribution and income replacement rates, increase the pension fund’s profitability and introduce automatic stabilizing mechanisms to ensure the pension’s long-term sustainability while expanding credit for those who give birth and complete military service.
“We will restore public trust in the national pension by pursuing sustainable reforms that can endure over time,” he said.
Yoon said the government will soon announce the detailed pension reform plan, asking for the active cooperation of the opposition-controlled National Assembly in revising the pension law.
The latest proposal follows previous attempts by the ruling and opposition parties to reach a consensus on pension reform, which failed in the last National Assembly.
While both sides agreed on the need for changes that would require higher contributions and provide greater benefits after retirement, they diverged on the appropriate income replacement ratio.
