Stop Attempts to Worsen the National Pension System

Turning the National Pension into a structurally unsound system would increase the public’s welfare burden and drag the national economy into a black hole. It is deeply concerning that the political establishment is trying to distort the National Pension system in the wrong direction.

The Public Deliberation Committee under the National Assembly’s Special Committee on Pension Reform has stepped forward with a plan to undermine the National Pension through a “pay more, receive more” approach. The essence of the proposal is that for the current generation to receive more money, future generations must pay more. This is an extremely irresponsible idea. It amounts to sacrificing the future in order to gain political popularity among the middle-aged and older generations, who hold many votes, and it will only fuel conflict and hinder social integration.

Sacrificing future generations for the sake of the current generation is wrong because it would worsen the system. The current generation, which is already receiving benefits relative to what it has contributed, would only be dismantling the social order by drawing on the resources of future generations to receive more money.

Future generations are being asked to pay higher pension contributions despite uncertainty over whether they will even be able to receive benefits in old age, which is likely to increase social instability even further. To prevent this, a generational separation of the fund is needed. In other words, the fund should be managed in a way that recognizes the current generation’s vested rights at the present level of benefits while separating it from the fund for future generations.

The National Pension is already financially unsound, like a bucket with a hole in it. The point of depletion is drawing nearer. Distrust of the National Pension is growing. Many people want to opt out of it.

People are being told to pay more even though there is little prospect of getting back the money taken from them like a tax, and that is bound to provoke outrage. Resistance is growing stronger because enrollment is compulsory. In this situation, making the hole in the broken bucket even bigger will throw our society into confusion.

Only by adhering to the “principle of insurance” can the National Pension remain sound. Emphasizing only social welfare damages the very essence of the National Pension. Insurance is personal, and it produces the best results when based on the principle of individual responsibility. The National Pension should be reformed so that individuals directly manage their insurance and receive a fixed amount.

The belief that increasing the level of social welfare is unconditionally good is an illusion. Even though pensions are already under a state monopoly, trying to guarantee old age by increasing the role of the National Pension is a distinctly socialist idea.

The government is not an all-powerful entity capable of replacing the market. By its very nature, insurance operated under a state monopoly cannot satisfy individuals’ lives. Instead, it only increases individuals’ burdens and depletes government finances, ultimately leading to nothing more than an addiction to social welfare.

Any attempt to worsen the National Pension system under the guise of reform must be stopped immediately. Using old-age security as a pretext to socialize the national economy is not sound politics. It is time to stop treating the National Pension as a sacrifice to politics and return it to the people.

The National Pension is for the people. Rather than damaging the system for the sake of a particular force or ideology, efforts should be made to improve it in a way that serves the people.

Sung-no Choi, President of the Center for Free Enterprise (CFE)

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Original title: 국민연금 개악 시도 중단해야

Author: Sung-no Choi

Date: 2024-04-29

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=press&idx=26585