40% of MZ Generation Say "I Must Receive It to Support Pension Reform"

Korea Institute of Statistics and National Pension Service Contract Survey
Many Aged 40-50 Concerned About "Future Pension Financial Instability"

In South Korea, people in their 20s and 30s, commonly referred to as the MZ generation, most frequently cited "to increase confidence that they will receive pensions in the future" as the primary reason why reform of the National Pension Service is necessary.

According to a survey conducted by the Korea Institute of Statistics on behalf of the National Pension Service, when asked why the National Pension system should be reformed, 38.3% of respondents in their 20s and 37.8% of those in their 30s answered "to increase confidence that they will receive pensions in the future," making it the most common response in these age groups.

National Pension Service Fund Management Headquarters

On the other hand, respondents in their 40s and 50s cited "because the future financial stability of the National Pension may become uncertain" as the top reason for reform (38.7% for those in their 40s, 40.6% for those in their 50s). Only 28.2% of respondents in their 20s selected financial instability as a reason for reform, the lowest among all age groups. Among those in their 30s, 32.3% gave this answer. Ultimately, this indicates that the MZ generation supports National Pension reform only if it increases the likelihood that they will be able to receive pensions in the future. This survey was conducted online from July to August last year with 2,025 National Pension subscribers and beneficiaries aged 20 to 59 nationwide.

The government reform plan for the National Pension, which President Yoon Suk-yeol is expected to announce at the end of this month or early next month, is reported to include a measure to apply different premium rates (contributions) depending on the generation. In other words, younger generations who are far from the pension receipt age would pay lower premiums, while middle-aged and older generations who are about to receive pensions would pay higher premiums. Currently, the same rate is applied regardless of age. For example, if the current premium rate of 9% is raised to 13?15%, a method could be applied where the middle-aged group increases their premiums by 1 percentage point annually, and the younger group by 0.5 percentage points annually, adjusting the timing to reach the target premium rate.

A presidential office official expressed a positive view on the generational differential plan, stating, "If National Pension reform focused on intergenerational equity and sustainability is implemented, the depletion of the fund could be delayed by more than 30 years from 2055." However, differential premium increases by generation are rare worldwide, and past pension reforms have repeatedly failed due to disagreements between ruling and opposition parties, making the passage of this reform plan uncertain.