National Pension: Subscribers Decreased by 70,000 in One Year While Beneficiaries Increased by 430,000

Experts: "Subscriber Numbers Likely to Decline Annually"
By 2027, Salary Expenditures Expected to Surpass Insurance Premium Revenues

Attention is focused on whether the number of National Pension subscribers will enter a full-fledged decline starting this year.

According to the latest statistics from the National Pension Service (NPS), the "2023 May National Pension Official Statistics" released on the 3rd, the total number of National Pension subscribers as of the end of May was 22,254,964. This is about 72,000 fewer than the number of subscribers at the end of May last year (22,327,648).

It is still uncertain whether the number of subscribers will continue to decline or if the decrease will be temporary. However, experts predict that the number of subscribers will shift to a downward trend starting this year.

The National Pension Research Institute of the NPS projected in its "Mid-term Financial Outlook for the National Pension (2023?2027)" report published in June that the number of National Pension subscribers would peak last year and decrease by nearly 1% to 22,274,653 this year.

Following this, the decline is expected to continue annually, with the number dropping to 21,636,401 by 2027, a decrease of 860,000 compared to this year, according to the institute's forecast.

The number of National Pension subscribers steadily increased about fivefold over 30 years from 4.43 million at the end of 1988, the year of its introduction. However, temporary declines were observed in 1998, 2000, 2004, and 2017.

In 2019 and 2020, the number also decreased for two consecutive years due to a decline in regional subscribers caused by the COVID-19 pandemic. However, it returned to an upward trend, reaching record highs of 22.348 million at the end of 2021 and 22.498 million at the end of last year.

On the other hand, while the number of subscribers paying National Pension premiums has decreased or stagnated, the number of pension recipients has sharply increased.

As of May, the total number of National Pension recipients, excluding lump-sum recipients, including old-age, disability, and survivor pensions, was 6,438,946. This is more than 430,000 higher than the 6,005,408 recipients in May last year. Including lump-sum recipients, the number has rapidly increased from 3.17 million in 2011, 4.03 million in 2015, to 5.16 million in 2019.

The mid-term financial outlook report expects the number of recipients to rise to the 7 million range in 2024, the 8 million range in 2026, and reach 9.05 million by 2027. Accordingly, it is anticipated that pension benefit expenditures will exceed premium income by 2027.

In response, the government is reviewing National Pension reform plans focused on financial stability, increasing the likelihood of premium rates rising by 15?18%. If this reform plan is adopted, premiums will increase by 15?18%, and recipients will likely receive benefits at a later age.

The National Pension Financial Calculation Committee and the Fund Management Development Committee, expert committees under the Ministry of Health and Welfare, held a public hearing at COEX in Seoul on the 1st and disclosed draft reports on the "Direction for National Pension System Improvement" and "Improvements in Fund Management."

The reports discussed proposals to raise the premium rate annually by 0.6 percentage points to 12%, 15%, and 18%, and to increase the pension payment starting age by one year every five years from 2033, raising it to 68 years old.

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