Pension Will Not Decrease Even If Reemployed

[Financial News] From next year, if a National Pension recipient's monthly income is below 5,090,000 won, the pension will not be reduced. This policy is designed to improve the situation where pensions are reduced because the elderly actively participate in economic activities and earn money.
 According to political circles and the government on the 19th, the government will improve the unreasonable National Pension system as one of its national tasks. Currently, if an old-age pension recipient earns money and that income exceeds a certain standard, the pension can be reduced by up to 50% for up to 5 years.
 The standard for determining the reduction is the 'A value', which refers to the average income of all National Pension subscribers over the past 3 years. The A value for 2025 is 3,089,062 won. For example, currently, if an old-age pension recipient earns more than 3,090,000 won through income activities, the pension can be reduced.
 The level of reduction varies depending on the extent to which the A value is exceeded (excess income monthly amount), and the government plans to abolish the reduction system in the relatively lower 1st section (below 1,000,000 won) and 2nd section (1,000,000 won to below 2,000,000 won) of the 5 sections of excess income monthly amount. The 2nd section applies to recipients with an excess income monthly amount below 2,000,000 won, so from next year, if the monthly income is below 5,090,062 won, the pension will not decrease.
 According to data from the National Pension Service, the number of recipients whose pensions were reduced due to income from reemployment after retirement increased by 52% from 89,892 in 2019 to 137,061 last year. The total pension reduction amount last year was 242,970,000,000 won.
 To address this, the government plans to announce old-age pension improvement measures next month and amend the law by the end of the year.
 In the first half of next year, the system will be reorganized, and from the second half, some reduction systems will be abolished, and the government will analyze the improvement effects by 2027 and consider expanding implementation. The government expects that if the reduction system for the 1st and 2nd sections of excess income monthly amount is abolished, an additional financial requirement of 535,600,000,000 won will occur over 5 years until 2030.
 The government also plans to gradually reduce the so-called 'couple reduction' in the basic pension system from 2027. Currently, if both the individual and their spouse are basic pension recipients, 20% is deducted from each of their basic pension amounts according to the law. To abolish the couple reduction, the government is considering a plan to reduce the amount by 15% in 2027 and by 10% in 2030 for the bottom 40% of income recipients.
 The government plans to amend the Basic Pension Act next year after discussions with the National Assembly's Special Committee on Pension Reform and reduce the reduction level from the following year.
 A Ministry of Health and Welfare official said, "There have been many complaints about reductions, and bills for abolition have been proposed," adding, "The abolition of the reduction system has been included as a task of the National Planning Committee, and detailed implementation plans will be finalized through a Cabinet meeting resolution in September."


junjun@fnnews.com Choi Yong-jun Reporter