On the 30th, the Democratic Party of Korea and the People Power Party clashed at the National Assembly’s Special Committee on Pension Reform over the issue of the depletion of the National Pension Fund.
The Democratic Party argued that even if the National Pension Fund depletes, the pension system itself will not collapse. Conversely, the People Power Party responded that it is necessary to approach the pension issue conservatively.
Democratic Party lawmaker Kang Seon-woo said at the full committee meeting on pensions that “the frame of fear being created about the ‘fund depletion’ is wrong,” and added that “if we look at how much National Pension Fund each country has compared to its Gross Domestic Product (GDP), South Korea is ranked first and is third in absolute terms after the United States and Japan.”
Kang noted, “Even if the pension fund is completely exhausted, it does not mean the collapse of the pension system.” He stated that “the assertion that ‘if the pension fund is depleted, the National Pension will not be paid’ is a kind of frame that is detached from reality,” and emphasized that “alternatives such as changing the financial management method for (pension payments) and modifying the contribution method must arise.”
In contrast, People Power Party lawmaker Woo Jae-jun said, “If the fund is completely depleted, we have to cover the shortfall through taxes or various insurance premium adjustments,” and emphasized, “It is important to protect the fund.” He added, “If there are many funds, the operating revenue can be returned to the people, and we can alleviate the shocks caused by rapid changes in the population structure.”
Regarding the government’s adjustment of the National Pension Fund's target revenue yield from 4.5% to 5.5%, the two parties showed differing opinions.
Democratic Party lawmaker Kim Nam-hee stated, “The average yield of the pension fund from 1988, when the National Pension Fund was established, to 2024 was 6.82% per year. The five-year average yield was 8.13%,” and questioned, “Is it not too conservative to expect the National Pension Fund revenue yield to be 5.5%?”
However, People Power Party lawmaker Kim Jae-seop remarked, “Setting the revenue yield target at 5.5% in a situation where anything could happen is optimistic.” He continued, “While saying that we will increase the overseas investment ratio to 60% in fund investments, both revenue and stability are important for the fund,” and expressed concern that “pursuing the 5.5% yield aggressively could jeopardize the portfolio.”