Starting in 2033, workers earning a monthly salary of 3 million won will pay 60,000 won more in National Pension monthly premiums than this year. In return, the monthly benefit in the first year of receiving the National Pension will increase by 90,000 won to 1.29 million won.
According to the National Pension reform plan agreed upon by the ruling and opposition parties on the 20th, the insurance premium rate (the amount paid) will increase by 0.5 percentage points each year from next year until 2033, starting from the current 9%. Consequently, the insurance premium rate will reach 13% by 2033.
Additionally, the income replacement rate will increase to 43% starting next year, up from 41.5% this year, which is an increase of 1.5 percentage points.
Mr. A, a worker in his 40s earning 3 million won a month, will have to pay an additional 7,500 won in premiums starting next year, according to the pension reform plan agreed upon by the ruling and opposition parties that day. If he paid 270,000 won this year, he will be paying 285,000 won next year, an increase of 15,000 won. However, the premium is shared equally between the employer and employee. By 2033, when the premium rate reaches 13%, the monthly premium will be 390,000 won, with the employee's share being 195,000 won.
Assuming Mr. A pays premiums according to the changing pension reform plan for 40 years, the total premium he will have to pay is approximately 187 million won. This is about 50 million won more than the current 133 million won.
Considering the increased income replacement rate, Mr. A is expected to receive approximately 1.32 million won monthly from the National Pension when he turns 65. This is 90,000 won more than the current amount of around 1.23 million won. Over 25 years, the total amount he can receive is about 310 million won, which is an increase of approximately 20 million won compared to the transfer.
However, those who are already receiving the pension are exempt from the increased income replacement rate. This applies only to those who will be National Pension subscribers when the premium rates increase starting next year. Those who have already surpassed the age limit for premium payment of 59 years old will not be subject to this.
The government believes that this pension reform will delay the depletion of the National Pension fund by nine years. The Ministry of Health and Welfare previously estimated that if the current insurance premium rate and income replacement rate are maintained, the National Pension fund would be completely depleted by 2055.