What are your thoughts on public pension?

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NEWs GENERATION is a program hosted by Arirang TV covering Korea’s latest trends and current affairs from the perspective of those in their twenties and thirties (millennial and Gen Zers, dubbed the ‘MZ Generation’ in Korea). For all of my appearances, visit
NEWs GENERATION Appearance.

Why have there been increasing calls for pension reform?

These calls have emerged as Korea has formally become a “super-aged” society where more than 20 percent of its population are those 65 or older, and birth rates are still at critically low numbers as many know. At this pace, that means that the number of recipients will only continue to rise in contrast to the number of subscribers decreasing, which is why a lot of young adults worry that the pension will be depleted before being able to receive its benefits.

As someone in their early twenties myself, I feel like my financial burdens for the pension will only grow as I start working in the future, which is why I understand why some have described it as a sort of ticking time bomb or Ponzi scheme, where the costs of the pension are disproportionately larger the younger you are.

How do Koreans feel about the current system? Is there a consensus, or is opinion divided?

Although subscription to the national pension plan in Korea is mandatory, there exists some exceptions where those who have no or reduced income can be exempt from this requirement. Out of these people, one finding shows that more than 50,000 people chose not to pay for their contributions despite being able to afford to do so.

Once again, a reason for this decision has been because of the unsustainability of the national pension as it stands today. Estimates project the pension to be depleted by 2055, which is when millennials born in 1990 turn 65, the age in which they start receiving their pensions.

Many predict that by 2055, the pension fund could be depleted. If that happens, younger generations, including ours, could pay into the system their entire working lives and receive nothing in return. How concerned are young people about this?

For those nearing their retirement, the national pension is a no-brainer because they get to receive far more money in return for their contributions, but a completely different story for young adults. More and more millennials and Gen Zers say that they would rather not receive anything if they had the choice not to pay for their pension scheme.

I personally see why that is, because I remember when I was working part-time and it was frustrating to see a part of my income forcefully being cut due to the pension, especially so with all this talk about my age group not being able to receive it in the future. One Korean comedy show went so far as to create a satirical K-Pop song featuring the lyrics “Less and less payers, more and more pensioners,” “I’m a pension slave, I got you receiving pension.”

Which countries are still struggling with pension challenges similar to Korea?

China is one country that has faced similar struggles with its pension fund reported to deplete within 10 years. Its state-endorsed public pension, which is a key part of the country’s three-tier pension system, has seen enrollments dwindle year after year as it too shifts to a more aging society, and more youth refusing to or boycotting making payments because of this risk.

Korea still has a long way to go before reaching a solution that earns broad public support. What do you think will be the key to fixing the pension system and bridging generational divides?

I think that a major part of the struggle behind pension reform in Korea is the lack of open discourse and information leading to a wide generational divide today. A lot of young adults think negatively of the pension scheme because they don’t know how their contributions will be used, especially when their future and post-retirement plans are so uncertain.

As someone who’ll be joining the workforce in the future, I do think that the pension system is necessary so that the elderly, which will include all of us at some point, get to enjoy a financially secure and stable life. I hope that we can move beyond political and generational rivalry to find a middle ground that reflects Korea’s demographic changes.