Ministry of Planning and Budget Reviews Retirement Pension Management Improvements

The Ministry of Planning and Budget announced that the National Pension fund is projected to shift to a deficit in 2048 and be depleted in 2064. Based on an assumed annual yield of 4.5% for the National Pension, the Ministry estimated that the fiscal deficit would reach 5.1% of GDP in 2065. Lim Gi-geun, Vice Minister of Planning and Budget, attended a plenary meeting of the Special Committee on Pension Reform at the National Assembly in Seoul on the 18th and delivered a briefing containing these details. Accordingly, the government will support stable retirement income security by improving retirement pension management and strengthening the multi-tiered old-age income security system, setting policy directions to boost fund returns and establish a robust multi-tiered system. Structural reforms to the pension system will be pursued to enhance the sustainability of public pensions.

This year's budget includes an expansion of child credits to 12 months for the first child and an increase to 12 months for military service credits. The Ministry of Planning and Budget plans to expand military service credits to the entire duration of service starting in 2027. The Ministry of Finance and Economy will prepare improvement measures to enhance the sustainability of basic pensions by the end of 2026.

The design of the fund-type retirement pension's detailed structure will be completed by July 2026, with legislative efforts to follow within the year. The Ministry of Finance and Economy will review measures such as easing operational regulations, reforming the default option (pre-designated operating system), and institutionalizing investment delegation to improve retirement pension management. Efforts to revitalize the capital market will be strengthened to boost private pension returns.