South Korea’s Yoon says pension reform needed to ensure fairness, income security

SEOUL: South Korean President Yoon Suk Yeol said on Thursday (Aug 29) the country’s national pension fund needs reform to make it more equitable among generations and to ensure income security for an ageing population.

There had been a loss of confidence in the pension system across generations and there was a need for fundamental and sustainable reform to restore the trust of those who needed it in retirement, Yoon told a televised briefing.

“Now is the time to fundamentally reform the national pension system that has the confidence of neither the elderly nor the youth,” he said.

“We will pursue reforms that will be persuasive to the youth who will be paying into the fund the longest and will be receiving pension the last.”

South Korea’s public pension fund, established in 1988 and currently the world’s third largest with 1,113.5 trillion won (US$833.98 billion) in assets, is expected to be depleted by 2055 as payments start to outpace contributions from 2041.

Reforming the system has been a policy goal for a series of South Korean presidents but there has been little progress because of disagreements on how to approach the issue.

Yoon also said he was pushing ahead with ambitious healthcare reforms, saying the focus is now on improving the quality of medical care in essential disciplines and regions outside of large cities.