The National Pension Service is a social insurance system that pays certain salaries to the elderly who pay premiums while doing economic activities with funds paid by the economically active population. It was designed to provide basic retirement income security. However, the National Pension Finance Estimation Committee announced that if the current national pension system is maintained based on the results of the “Fifth Fiscal Calculation,” the reserve fund will be exhausted by 2055 to minus 47 trillion won. 2055 is the year when people born in 1990 turn 65 and start receiving the national pension. If the national pension system is established as it is, it will be impossible to receive the national pension from the people born in 1990. Furthermore, as the premium rate has been raised, the number of young people who are negative about the national pension is increasing.
In order to maintain the national pension system, it is necessary to redesign the fund so that it will not be exhausted. Therefore, the government launched a national pension reform and moved forward with the announcement of the national pension's fiscal condition scheduled for March to January. The government has been making fiscal estimates every five years, including the first in 2003, the second in 2008, the third in 2013, and the fourth in 2018, and is currently proceeding with the fifth fiscal estimate. The fiscal estimate is to check the state of the national pension fund. Based on the results of the fiscal estimate in January, the government will gather opinions through meetings and discussions with the public and submit a proposal to the National Assembly by October. In other words, the basic framework of the pension system will be maintained and the figures such as how much to pay insurance premium rate and how much to receive later income replacement rate will be adjusted. However, whether it is “pay more and get more” or “pay more and receive as it is,” the reserve fund is exhausted. Even if progressive parameter reform is promoted, it will only delay the explosive bombs. In addition, public antipathy toward raising the national pension remains. In particular, young people in their 20s and 30s, who are about to open their pockets, are looking at them with coldly.
If you look at the past 36 years since the start of the National Pension Service, it is hard to find a year in which the people's satisfaction with the national pension was high. Money comes out every month, but it's a long way from receiving it. It's not easy to reform in this atmosphere. Politicians have long given up reform with the election in mind, but the Kim Dae Jung and Roh Moo Hyun governments have had two system reforms. Since then, no proper national pension reform has been carried out. The National Pension Reform is an issue that could affect the safety of the administration, and the government did not even try or pretend to be concerned about falling approval ratings. As a result, the premium rate, which was 3% of monthly income, rose to 9% of monthly income in 1998, and remained flat for 25 years. Considering the various conflicts of interest and the schedule of the 2024 general election, discussions on reform will not be easy.
This is the situation in Korea, which has a population cliff. The birth rate has plummeted due to the economic downturn and job insecurity. According to the National Statistical Office, the total fertility rate in Korea was 0.84 as of 2020. Only one member of the Organization for Economic Cooperation and Development (OECD) recorded less than one person. In other words, they are overwhelmingly in last place. Korea is expected to enter a super-aged society by 2025 with over 20 percent of the total population aged 65. If everyone becomes old and cannot get help from their children, they have to make a living by working themselves, or they have saved money or live on a pension. You can receive the national pension every month until you die. The problem is that the number of elderly people receiving pensions is increasing as life expectancy is extended even though the number of supporting generations decreases. This is why the declining birthrate and aging population are blamed for the deterioration of the national pension budget. This cannot be solved only by adjusting the parameters of “pay more, pay less, pay later.” In other words, fiscal stabilization cannot be the sole goal of pension reform. According to the first national pension reform in 1998, the age of receiving the national pension has been gradually raised from 60 to 65 by 2033. However, the maximum age remaining for joining the national pension is 59 years. As the number of elderly people participating in economic activities has increased due to the aging of the population and the extension of retirement age, the upper limit of membership should be raised according to the starting age of supply and demand.
Most of the current “MZ generation” young people think that the national pension is “money that cannot be received” and are negative. In other words, the rising premium rate is a burden. Through this, it was confirmed that the direction of the current administration's national pension reform and public opinion are at odds with each other. The government is focusing on raising monthly insurance premiums to improve the sustainability of the national pension system, but young people's views on raising insurance premiums were cold. The reality of the MZ generation is bleak. The national pension of tens of thousands of won is a burden for young people who have given up seven generations: love, marriage, childbirth, home purchase, love, dreams, and hope. It seems that fundamental supplementation for stable system management should be considered. Experts agreed that it is important to restore the trust of the MZ generation. To this end, reform is needed to stabilize the nation's finances. For example, the most important thing is to raise the premium rate to share the responsibility of the current generation, and at the same time to come up with income protection measures to give the trust that the younger generation can receive pensions.
The national pension system is a social welfare system designed to protect old age income. However, due to the declining birthrate and aging population and slowing economic growth, the national pension system is in danger of being exhausted, and it is not a system for old age, but rather a burden on young people living today. The purpose of the social security system should be clarified through the reform of the national pension system. Social institutional efforts are needed to ensure a life in which everyone can be happy.
노혜원 mqbler@dgu.ac.kr
