A government-funded study has surfaced with stark warnings that elderly poverty could worsen dramatically under the current system. (Image courtesy of Yonhap)
SEOUL, Sept. 3 (Korea Bizwire) — A government-funded study, quietly withheld during South Korea’s contentious pension reform debate, has surfaced with stark warnings that elderly poverty could worsen dramatically under the current system, raising questions over transparency and policy priorities.
The report, produced last December by researchers at the National Pension Research Institute, projected that if the pension system remains unchanged — with a 40 percent income replacement rate and a 9 percent contribution rate — the nation’s already high elderly poverty rate would climb from 37.4 percent in 2025 to 42.3 percent by 2050. That figure would remain among the highest in the OECD.
Researchers cited a rapid demographic shift as a key driver: the share of lower-income “late elderly” citizens, aged 75 and older, is expected to rise sharply while the proportion of younger retirees declines.
Even when combined with the basic pension, public benefits would not be enough to prevent nearly half of older Koreans from living in poverty, the study concluded.
Elderly people lining up to receive free meals at Tapgol Park in Jongno-gu, Seoul. (Image courtesy of Yonhap)
It urged a stronger role for the national pension, higher replacement rates, and a multi-layered income security system including mandatory occupational pensions.
The findings contrasted with the government’s reform blueprint at the time, which focused on stabilizing pension finances rather than expanding benefits.
The report was initially marked for permanent confidentiality in May, just after the ruling and opposition parties reached a rare bipartisan pension reform deal — the first in 18 years.
It was only disclosed late last month after pressure from progressive lawmakers, who accused the administration of suppressing inconvenient research.
The March reform deal raised contribution rates gradually to 13 percent by 2033 while lifting the income replacement rate to 43 percent, a compromise aimed at delaying the fund’s depletion from 2056 to 2071.
It also enshrined a clearer state guarantee of benefits. But experts warn the changes amount only to a “parametric” fix, leaving deeper structural reforms — such as aligning the basic and national pensions — unresolved.
“The latest study underscores that even after reform, South Korea faces an urgent choice between fiscal prudence and meaningful old-age security,” said one lawmaker. “The challenge now is to achieve both.”
M. H. Lee (mhlee@koreabizwire.com)
