“If we emphasize the benefits of signing up early, the insurance premium payment rate for those in their 20s will increase.” As experts continue to suggest that the system needs to be improved so that everyone can automatically sign up for the national pension when they turn 18, attention is focused on whether it will be realized.
In order for the National Pension to literally serve as a retirement income security device for all ‘citizens’, it is necessary to secure the right to receive benefits by filling the minimum subscription period (120 months) by having people sign up for the National Pension early, while at the same time increasing the subscription period to increase the benefit amount. Because it needs to be raised.
The National Pension has a structure in which you sign up early and the longer you sign up, the greater the amount of pension you receive in retirement.
According to the National Pension Service on the 24th, all citizens between the ages of 18 and 60 with income are subject to mandatory subscription to the National Pension.
Therefore, even if you are a student or soldier, if you have income, you must sign up from the age of 18, but if you do not have income, you are excluded from application until the age of 27.
After the age of 27, only non-income spouses such as full-time housewives are excluded from the application, and the rest are converted to payment exemptions even if they have no income.
In relation to this, Kim Tae-il, a professor of public administration at Korea University, suggested in his recently published ‘Inconvenient Pension Plan’, “Let’s change these current regulations and make everyone automatically enrolled at the age of 18.”
Professor Kim said, “If the government notifies young people who are less interested in the national pension that they have enrolled in the national pension and continues to emphasize how important the national pension is for preparing for retirement and how beneficial it is to pay insurance premiums early, the insurance premium payment rate for those in their 20s will drop. “It will rise significantly,” he explained.
In this way, people over the age of 18 with no income are not excluded from coverage, but they are exempt from payment, so even if they do not pay premiums due to lack of income in their 20s, they are already enrolled, so it is easier to pay later through the payment (additional payment) system when they earn income. You can extend your subscription period.
The additional payment system is a system that allows you to pay premiums for the period in which you were unable to pay premiums due to loss of employment, business interruption, or worsening health, etc. while paying premiums after signing up for the national pension.
To utilize this system, which has been in effect since April 1999, you must first sign up.
Prior to this, Jeong In-young, an associate research fellow at the National Pension Research Institute, said through data from the National Pension Financial Calculation Committee meeting held in July of last year, “When the government reaches the mandatory subscription age of 18, the government will subsidize the first month’s insurance premiums for all young people and force them to subscribe.” “There is a need to actively consider ways to support the first national pension premium in life,” he suggested.
A government researcher said, “Once young people sign up for the national pension by paying the first month’s premium, even if they are unable to pay the premium due to difficulties in living after that, the subscription period can be extended by utilizing the payment system at a later date during this payment exception period.” “There is,” he emphasized.
According to the report (2018) on ‘Research on ways to improve the national pension credit system for unemployed youth’ in which a government research committee member participated as a researcher, the pension subscription performance of people in their 20s in Korea is lower than that of other countries.
The pension subscription rate for people in their 20s is only 35% in Korea, but it is high at around 80% in the US, UK, and Japan.
This phenomenon is due to the high level of instability among young people aged 18 to 34 in Korea’s labor market, resulting in a low level of overall economic activity participation.
As of 2021, the economically inactive population rate among young people is 36%, which is a large difference compared to the economically inactive population rate of all national pension subscribers (22%).
Due to this unstable status, young people are excluded from signing up for the national pension and are highly likely to suffer hardships in old age by not receiving pension or receiving less pension.
In fact, the rate of exclusion from national pension coverage among young people aged 18 to 27 is about 53%, which is 2.5 to 3 times higher than that of other age groups.
/yunhap news
