Key Takeaways
- • Democratic Party of Korea lawmaker Nam In-soon and 10 co-sponsors introduced a bill on November 10, 2026 to partially revise the National Pension Act, requiring the state to cover 50% of National Pension Service administrative and operating expenses by 2031.
- • The state's share would phase in from 20% in 2028 to 30% in 2029, 40% in 2030, and 50% in 2031, with an effective date of January 1, 2028.
- • Treasury support has been capped at about 10 billion won annually since 2010, and the National Pension Fund has covered 9.346 trillion won, or 84.5%, of the 11.0607 trillion won in total administrative and operating costs incurred to date.
- • Detailed calculation standards and payment procedures would be set by presidential decree.
Summary
A bill to partially revise the National Pension Act, sponsored on November 10 by Nam In-soon, a Democratic Party of Korea lawmaker on the National Assembly's Health and Welfare Committee, would require the national treasury to cover half of the National Pension Service's administrative and operating expenses. The measure would raise the state's share gradually to 50% by 2031, easing the financial burden on the pension fund and strengthening the state's responsibility for public pensions, according to the source report, which was published by Asia Business Daily.
Current law requires the state to cover all or part of the costs incurred by the National Pension Service and the National Health Insurance Service in managing the national pension program, but it does not specify a precise share. As a result, treasury support for the National Pension Service's administrative and operating expenses has remained at around 10 billion won annually since 2010. Between the system's introduction in 1988 and 1991, the national treasury covered all such expenses. Since then, the National Pension Fund, financed by contributor premiums and investment returns, has absorbed most of the costs: of the 11.0607 trillion won in total expenses incurred to date, 9.346 trillion won, or 84.5%, has been paid from the fund.
The bill sets January 1, 2028 as its effective date and provides for a phased implementation, with the state's share starting at 20% in 2028, rising to 30% in 2029 and 40% in 2030, before reaching 50% in 2031. Details on calculating the state's contribution and on payment and settlement procedures would be prescribed by presidential decree. The bill was co-sponsored by 10 other Democratic Party of Korea lawmakers: Lee Sujin, Kwon Hyangyeop, Kim Yun, Paik Hyeryeon, Kim Namhee, Jeon Jinsuk, Lee Juhee, Seo Mihwa, Heo Jongshik and Park Jiwon.
Nam argued that the state has shifted its responsibility onto contributors and the fund by holding treasury support to a fixed amount for more than 15 years. She said that premiums paid for retirement should not be used to offset inadequate state support, and that the revision would clarify the state's responsibility and strengthen the fund's financial stability.
Current law requires the state to cover all or part of the costs incurred by the National Pension Service and the National Health Insurance Service in managing the national pension program, but it does not specify a precise share. As a result, treasury support for the National Pension Service's administrative and operating expenses has remained at around 10 billion won annually since 2010. Between the system's introduction in 1988 and 1991, the national treasury covered all such expenses. Since then, the National Pension Fund, financed by contributor premiums and investment returns, has absorbed most of the costs: of the 11.0607 trillion won in total expenses incurred to date, 9.346 trillion won, or 84.5%, has been paid from the fund.
The bill sets January 1, 2028 as its effective date and provides for a phased implementation, with the state's share starting at 20% in 2028, rising to 30% in 2029 and 40% in 2030, before reaching 50% in 2031. Details on calculating the state's contribution and on payment and settlement procedures would be prescribed by presidential decree. The bill was co-sponsored by 10 other Democratic Party of Korea lawmakers: Lee Sujin, Kwon Hyangyeop, Kim Yun, Paik Hyeryeon, Kim Namhee, Jeon Jinsuk, Lee Juhee, Seo Mihwa, Heo Jongshik and Park Jiwon.
Nam argued that the state has shifted its responsibility onto contributors and the fund by holding treasury support to a fixed amount for more than 15 years. She said that premiums paid for retirement should not be used to offset inadequate state support, and that the revision would clarify the state's responsibility and strengthen the fund's financial stability.
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