"Receiving Basic Pension"…National Pension Amount Much Lower Than Teachers and Public Officials

Analysis by Researchers at the National Pension Research Institute
Average Monthly National Pension 550,000 KRW · Government Officials 2,530,000 KRW

Even considering that National Pension recipients receive the Basic Pension, an analysis revealed that they receive significantly lower pension amounts compared to recipients of special occupational pensions such as the Government Employees Pension and the Private School Teachers Pension.

The National Pension Research Institute recently released the results of an analysis on the benefit equity between the National Pension and special occupational pensions, taking into account the receipt of the Basic Pension, in its report titled "Comparative Study of the National Pension and Special Occupational Pensions." The research team created a simulation model considering the receipt of the Basic Pension and the income redistribution application rates of the Government Employees and Private School Teachers Pensions. As a result, for those with a subscription period of 20 years or more, recipients of the Government Employees and Private School Teachers Pensions received at least 1.95 times to a maximum of 2.64 times more pension than National Pension recipients who also receive the Basic Pension. However, when the subscription period was 10 years and the monthly income was 1 million KRW, the gap between the pension amounts of National Pension recipients receiving the Basic Pension and those receiving the Government Employees and Private School Teachers Pensions narrowed somewhat.

National Pension Service Fund Management Headquarters

The Basic Pension is a retirement income security system that provides a fixed amount of money through taxes to elderly people aged 65 or older who are in the bottom 70% income bracket. National Pension recipients also receive the Basic Pension if they meet these conditions, but recipients of the Government Employees Pension, Private School Teachers Pension, Military Pension (including lump-sum pension recipients), and their spouses are fundamentally excluded from the Basic Pension.

The research team identified the primary cause of this disparity as the much longer subscription periods of special occupational pension subscribers compared to National Pension subscribers. According to the average subscription periods by pension type for new recipients in 2022, the National Pension averaged 19 years and 2 months, while the Government Employees Pension averaged 32 years and 3 months, the Private School Teachers Pension 29 years and 6 months, and the Military Pension 28 years, showing that special occupational pension subscribers have significantly longer subscription periods than National Pension subscribers.

Additionally, the research team pointed out that the upper limit of the standard monthly income for special occupational pensions is much higher than that of the National Pension, and that the A value of special occupational pensions is significantly higher than that of the National Pension. These factors are considered the main reasons for the difference in pension amounts between the National Pension and special occupational pensions. The A value is the average of the three-year average monthly income before pension receipt for all pension subscribers, and the standard monthly income is the income basis used to impose insurance premiums and calculate retirement pension amounts.

The standard monthly income for the National Pension increased from 3.6 million KRW in 2010 to 6.17 million KRW in 2024, a 1.7-fold increase over 14 years, but it remains much lower than other special occupational pensions such as the Government Employees Pension. The income ceiling for the Government Employees and Private School Teachers Pensions is 8.56 million KRW per month. Because the National Pension’s standard monthly income ceiling is set relatively low, it fails to reflect the annually rising consumer prices, wages, and subscriber income levels, leading to ongoing criticism that it does not guarantee adequate pension income in retirement.

National Pension Service Logo

As of 2021, the average monthly pension amount for recipients of each public pension shows that the National Pension (old-age pension) was only 550,203 KRW, while the Government Employees Pension (retirement pension) was 2,537,160 KRW, the Military Pension was 2,771,336 KRW, and the Private School Teachers Pension was 2,938,790 KRW, with the average monthly amount for special occupational pension recipients being about five times higher than that of National Pension recipients.

The research team suggested, "It is necessary to explore various measures to enhance benefit equity among public pension systems such as the National Pension and special occupational pensions, and to ensure adequate retirement income for the general public by increasing the actual income replacement rate through extending the subscription period of the National Pension."

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