A Study on the Public Pension Sliding Method According to Socioeconomic Changes

Abstract

Changes in Korea’s demographic structure, such as aging, are expected to proceed rapidly. Changes in the Population structure due to the extension of life expectancy are closely related to stable system operation of public pensions that consider life cycles. In many countries that have already experienced aging, it is easy to find cases of countries operating a pension benefit automatic adjustment that can consider socioeconomic changes. The National Pension plans to estimate its a long term financial status in 2023, and it also includes pension reform as the government’s national agenda. The National Pension Service is expected to reform with an appropriate burden and appropriate salary and operate the system stably through this. In order to minimize political costs and operate a stable system through intergenerational solidarity, the introduction effect was analyzed and implications were examined, focusing on the automatic adjustment method. In this study, the purpose and background of automatic adjustment methods in Japan, Finland, Germany, and Sweden were examined in detail, and implications were examined. The concepts and theories of Finland’s application of the expected lifetime coefficient, Japan’s macroeconomic slide, Germany’s sustainability factor, and Sweden’s automatic adjustment method in the NDC were mathematically reviewed. The automatic adjustment method analyzed in this study is implemented in the mid-2030s, and before that, it is premised that the current imbalance in supply and demand burden will be partially resolved by raising the National Pension contribution rate. Considering the characteristics of each Pension, such as the National Pension and Government Employees Pension, the practical limitations of the automatic adjustment method and the premise of introduction are being reviewed.