National pension

In the novel “South Bound“ by Hideo Okuda, an author popular among Korean college students for his book “The Flying Trapeze,” the father of the young protagonist Jiro Uehara shouts, “I won’t pay the national pension fund!” when a female public servant encourages him to do so. Jiro’s father is a student activist-turned-anarchist who tells public officials of the unfairness of national pension whenever they urge him to join.

Though the novel is written in a cheerful tone, the father considers the national pension fund a government control device to restrict individual freedom and choices. Koreans were also hostile to the national pension fund in the past. Eight strange stories on the fund rapidly spread on the Internet in 2004. Though not completely true, the stories reflected public distrust of the pension such as the restriction of the right to receive pension benefits, the cap on monthly income, mandatory subscription, and fears over the fund’s depletion.

This year, the number of subscribers to the national pension hit a record 19.25 million. The number of both workplace and regional subscribers rose more than 570,000. Since a campaign to join the fund began in July, the number of subscribers has grown 3,300 a day on average. The 2007 revision to increase payments and decrease benefits relieved public worries over depletion of the fund. With increases in life expectancy and the number of beneficiaries, more people believe that the fund can provide social security for the aged. Since its launch in 1988, the fund has been plagued by public misunderstanding and distrust but has taken root despite the difficulties.

The number of voluntary subscribers has also soared. The number of voluntary subscribers, the majority of whom are housewives, grew 11-fold this year to 371 from 34 last year. The surge was thanks to the calculation that the receipt period is much longer than that of payment due to the increase in life expectancy. In Seoul, the increase in the number of voluntary subscribers has been the most acute in the Gangnam, Songpa, Seocho and Yangcheon districts. This implies that the national pension fund has emerged as a new form of investment for high-income earners. This year, the number of pension beneficiaries topped 3 million and the fund’s amount reached 300 trillion won (262 billion U.S. dollars). Though 5.1 million people eligible to subscribe to the fund have not done so, the fund continues to flourish year after year.

Editorial Writer Chung Sung-hee (shchung@donga.com)