[News Terms] 83% of Last Year's Non-Guaranteed Government Debt is 'Yeongeum Chungdang Buchae'

'Pension liability' is the amount calculated in advance at the present time for the total pension payments to be made to beneficiaries from the civil servant and military pension funds over the next 70 years. It is a concept used as an operational indicator by calculating the total expected expenditures over a long period while managing the pension system.

Because the term 'liability' is included in the phrase 'pension liability,' it can be misunderstood as the same concept as 'national debt,' which must be fully repaid with taxpayers' money. Therefore, some accounting experts argue that the term 'total expected pension expenditure' is more appropriate than 'pension liability.'

National debt is the debt incurred when the government borrows money domestically and internationally to cover fiscal deficits, and it is a definite debt that the central government and local governments must repay. National liabilities combine national debt (definite debt) and contingent liabilities (potential debt). National liabilities are a larger and more comprehensive concept than national debt. Contingent liabilities include pension liabilities and other debts.

National debt is money the government has already spent, but pension liability is a future expected expenditure, and there are revenue sources such as pension insurance premiums paid by contributors and government contributions corresponding to the expenditure, which is a key difference.

According to the '2022 Fiscal Year National Settlement Report' announced by the government on the 5th, the definite liabilities among national liabilities last year were 907.4 trillion won, and contingent liabilities were 1,418.8 trillion won. Most of the contingent liabilities were pension liabilities, accounting for 1,181.3 trillion won, or 83.2% of contingent liabilities, which increased by 43.2 trillion won (3.8%) compared to the previous year.

If last year's pension liability was 1,181.3 trillion won, it means that this amount of expenditure is expected over the next 70 years. Simply put, it means that 1,181.3 trillion won must be spent on civil servant and military pensions over the next 70 years. The estimated expenditure budget is financed by the income from insurance premiums paid monthly by civil servant and military pension subscribers, which is about 18% of their income, and the premiums paid by the government as the employer.

This content was produced with the assistance of AI translation services.