Pension and retirement reform must address youth distrust

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Pension and retirement reform must address youth distrust

Published: 09 Oct. 2025, 00:02

Audio report: written by reporters, read by AI

Jeon Yong-il

The author is a professor of Economics, Sungkyunkwan University

Korea’s rapidly shifting economic and social conditions are pushing the government and the National Assembly to consider reforms in pensions and employment. Lawmakers are expected to propose legislation within the year, with special focuses on the sustainability of the national pension system and debate over extending the retirement age. Public interest has grown as the country faces a falling birthrate and growing population of older adults. But political discussion often remains abstract, with little reflection of generational concerns.

A general consultation room at the Seoul Northern Regional Headquarters of the National Pension Service is seen on March 17. [YONHAP]

Korea’s demographic structure shows that the labor force is dominated by people in their 40s and 50s, and the share of those over 60 is rising quickly. Older workers generally hold positive views of the National Pension Service and favor extending the retirement age or rehiring to secure financial stability in old age.

Younger workers in their 20s and 30s see things differently. Their shrinking population share weakens their political voice. They often regard future pension benefits as small, delayed or uncertain. Many fear they may never receive payments at all. They also see retirement age extensions and rehiring programs as potential threats to their ability to gain desirable positions in large firms and public corporations. For younger workers who do not expect to spend their lifetime working for a single company, the extension of retirement appears to limit opportunities and wage growth.

The lack of collective channels for young Koreans to express their views further complicates the debate. Experts have also pointed to the need for more empirical research on intergenerational attitudes toward pensions. A recent survey conducted by the Korean Employment and Welfare Society, which questioned 2,000 workers nationwide aged 20 and above, highlights the scale of skepticism. Asked about the sustainability of the national pension system, 32.9 percent said they did not trust it, compared to the 27.4 percent who said they did. Distrust outpaced trust by 5.6 percentage points, with the gap being the widest among younger groups.

By age, 47.1 percent of those in their 60s expressed trust in the system, compared to 33.3 percent in their 50s, 24.4 percent in their 40s, 20.5 percent in their 20s and just 15.5 percent in their 30s. The younger the respondent, the less confidence there was in the pension system. Among reasons for distrust, 71 percent feared that the fund would be depleted before they benefit. Another 10.9 percent cited concerns that payouts would be too small compared to contributions.

Questions of fairness also resonated strongly among younger people. More than a quarter of those in their 20s and nearly a quarter of those in their 30s felt that the system’s unfair distribution had not been addressed, in comparison to 14.6 percent among those in their 50s and 10.8 percent among those in their 60s or older. For young Koreans, the pension is increasingly viewed as a burden rather than a safety net.

The survey also asked about the possibility of the National Pension Service entering the corporate retirement fund market, traditionally operated by private financial institutions. Overall, 37.4 percent opposed the idea, while 28.2 percent supported it. By age, opposition ran at 33.4 percent among those in their 60s, 37.3 percent in their 50s, 34 percent in their 40s, 42.2 percent in their 30s and 39.7 percent in their 20s. Again, younger groups showed stronger resistance. Their primary concern was the potential loss of control over managing their own retirement funds. Older respondents, meanwhile, pointed to the risk that taxpayers might bear losses if the public fund suffered from poor investment results.

Lamwakers in their 30s and 40s from the Democratic Party, People Power Party and Reform Party hold a press conference to oppose the latest pension reform at the National Assembly in Yeouido, western Seoul on March 23. [YONHAP]

With the population of older adults growing rapidly, discussions of pension sustainability and retirement reform are unavoidable. Other countries have already expanded pension programs and encouraged longer working lives. But unless Korea reflects the opinions of its younger generations in its policymaking, the system may fail to secure broad public support. Bridging these generational divides requires more than abstract arguments about necessity. It demands careful data, attention to fairness and a commitment to policies that recognize the very different realities faced by older and younger workers.

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.