National Pension Surplus Extended by Two Years, Projected Until 2029

National Pension Research Institute Releases 'Mid-term Financial Outlook' Report
Reflecting Pension Reform Measures... Surplus Size Expected to Decrease

An analysis has found that the National Pension Service's insurance premium balance, which was expected to turn into a deficit in 2027, will remain in surplus until 2029.

According to the "National Pension Mid-term Financial Outlook (2025-2029)" report released by the National Pension Research Institute on July 31, the insurance premium balance of the National Pension Service (insurance premium income minus pension payments) is projected to remain in surplus, reaching 5.0028 trillion won in 2029.

The mid-term financial outlook is an annual report that analyzes the financial trends of the National Pension Service over five years. The report released this time is the first since the National Pension reform implemented in March of this year. In the previous mid-term financial outlook (2024-2028), which was released before the reform, it was projected that the insurance premium balance would turn into a deficit in 2027. As a result, the surplus trend of the National Pension Service has been extended by two years compared to the previous projection.

However, the report forecasts that the size of the surplus will decrease. By year, it is expected to decline from 12.5854 trillion won this year to 10.0188 trillion won in 2026, 7.1268 trillion won in 2027, 6.1584 trillion won in 2028, and 5.0028 trillion won in 2029. This is because the number of subscribers is decreasing due to a decline in the working-age population caused by sharply falling birth rates and rapid aging, while the number of pension recipients is soaring due to the retirement of the baby boomer generation, resulting in expenditures exceeding income.

Due to the recent reform, the National Pension insurance premium rate (the amount paid) will be raised from the current 9% to 13%, increasing by 0.5 percentage points each year for eight years starting next year. Meanwhile, the income replacement rate, which determines the amount received, will be increased all at once from 41.5% this year to 43% next year, further increasing expenditures.

The fund's reserves are expected to continue growing for some time, thanks to investment management returns and interest income generated by operating the reserves. The report projects that the fund's reserves will increase from 1,272.3235 trillion won this year to 1,554.8630 trillion won in 2029.