Soldier Salary 1 Million Won... "Considering Mandatory National Pension Enrollment During Service Period"

Suggestions Presented at the National Pension Financial Calculation Committee
"Change to Advance Support and Extend the Period"

There is growing attention to the suggestion of mandating enrollment in the National Pension during military service in consideration of the increase in soldiers' salaries.

According to materials from the 11th meeting of the National Pension Financial Calculation Committee, which the government is operating for pension reform on the 6th, this view emerged during the discussion of the so-called National Pension credit system improvement plan at the meeting held on the 7th of last month.

The credit system is a mechanism that additionally recognizes the subscription period of the National Pension as a form of reward for socially valuable activities. Childbirth and military service are currently credits implemented domestically.

The National Pension requires anyone aged 18 to 59 to enroll. However, during periods of no income activity such as schooling, military service, unemployment, or business closure, one can apply for a payment exemption and not pay premiums. However, the pension amount to be received later decreases by the length of the exemption period.

The military service credit, introduced in 2008, is a device that recognizes the period served in the military as an active-duty soldier or social service agent (public service worker) as a subscription period. The necessary funds for this are fully covered by taxes.

However, the subscription period recognized as military service credit is only six months, much shorter than the actual military service period. Moreover, the recognized income is only 50% of the average monthly income (A value) over three years of all National Pension subscribers, leading to criticisms of ineffectiveness. In 2023, the A value was 2,861,091 KRW.

[Image source=Provided by the Ministry of National Defense]

Dr. Jeong In-young of the National Pension Research Institute, who presented the credit system improvement plan, suggested, “It is necessary to change the military service credit from a post-support system to a pre-support system, expand the period to cover the entire military service period, and raise the recognized income to 100% of the A value.”

At the meeting, there was consensus on changing the military service credit to a pre-support system, and opinions were also expressed that expanding the recognized period should be a priority.

In particular, reflecting the situation where soldiers' salaries have increased, there was a proposal to actively consider abolishing the payment exemption system during military service and mandating enrollment in the National Pension to pay premiums.

According to the Ministry of National Defense, this year’s soldier salary reached 1,000,000 KRW for a sergeant. This is an increase of 323,900 KRW from last year’s 676,100 KRW. Corporals’ salaries rose from 612,000 KRW to 800,000 KRW, corporals first class from 552,100 KRW to 680,000 KRW, and privates from 510,000 KRW to 600,000 KRW. The government plans to raise soldiers’ salaries to 1,500,000 KRW for sergeants by 2025, as outlined in its national agenda.

However, the National Assembly Budget Office pointed out in its comprehensive analysis report on the 2023 budget proposal that “although there are positive effects of increasing soldiers’ salaries, the increase in rigid defense budgets may cause delays in acquiring advanced weapon systems and difficulties in securing junior officers.”