Nearly 20,000 Receive Over 100 Million Won in National Pension Despite Paying Under 8 Million Won Amid Fund Depletion Concerns

It has been found that nearly 20,000 National Pension subscribers have received over 100 million won in payouts despite paying less than 10 million won in total insurance premiums.

According to data submitted by the National Pension Service to People Power Party lawmaker Choi Bo-yoon, 19,972 people have received pension payouts exceeding 100 million won despite having paid 10 million won or less in premiums.

They paid an average of 8.33 million won in premiums and received a total of 111.9 million won in pension benefits over 260 months.

This means they received more than 10 times the amount of insurance premiums they paid over their lifetimes.

Such pension receipts are attributed to the influence of subscribing during the early days of the system.

When the National Pension was introduced in 1988 to encourage enrollment, it started with a contribution rate of 3% and an income replacement rate of 70%.

While a minimum 10-year subscription period is currently required to qualify for benefits, a special old-age pension system allowing eligibility with just 5 years of subscription was temporarily operated until 1999 during the early stages of the system.

Yoon Seok-myung, an emeritus research fellow at the Korea Institute for Health and Social Affairs, stated, "Two pathways likely had an impact: subscribers who joined when the early income replacement rate was high, and subscribers who have continuously received pensions through the special pension system," adding, "Subscribers who receive more pension than the premiums they paid will continue to increase."

Currently, at least 3,260,147 people have received more National Pension benefits than the premiums they paid.

Due to rapid aging and low birth rates raising concerns over the sustainability of the National Pension finances, the contribution rate was adjusted to 13% and the income replacement rate to 43%.

Even so, the future of the National Pension finances remains uncertain.

According to the National Assembly Budget Office, if the current system is maintained, the National Pension financial balance will turn into a deficit in 2050 and be depleted in 2069.

At a pension reform policy debate held at the National Assembly on September 28, voices were also raised pointing out that additional reforms are necessary as the break-even contribution rate required to pay the 43% income replacement rate reaches 21.2%.

Reported by Jung Da-eun | Video by Lee Yu-jin | Graphics by Lee Jeong-ju | Produced by SBS Digital News
※ Please note: This article was translated by AI and may contain errors.