In a recent editorial for Korea Economic Daily (Hankuk Kyungje Simun), Professor Emeritus (Konkuk University) and ICePP Visiting Scholar Wonshik Kim highlights a critical issue in the debate surrounding South Korea’s National Pension Service reform: the focus on increasing the income replacement rate risks financial instability. Political leaders have proposed various plans to raise the replacement rate, but this emphasis undermines efforts for long-term financial sustainability. The conditions today—longer life expectancies, delayed employment, shorter working periods, and a declining fertility rate—are vastly different from when the pension system was first introduced. Additionally, comprehensive retirement security policies now in place reduce the importance of the income replacement rate. Kim argues that pension reform should target structural changes and increasing insurance premiums to stabilize finances rather than focusing on the replacement rate.
Read the full article (in Korean) here.