Faced with mounting deficits in its pension funds, Korea´s Ministry of Health and Welfare (MOHW) is calling for reforms to its national pension fund. Its proposal would raise subscriber contributions from 9% of workers´ earnings to 12-13% between 2010 and 2020.  It would also reduce post-retirement pension payments from 60% of a worker´s former salary to 50% initially, and 40% later on.  This is a compromise from the government´s earlier plan, which included higher contributions. Additionally, the MOHW plans to make extra payments of 80,000 won (US$80) per month to lower-income senior citizens, who make up about 45% of the population over the age of 65.

At the same time, salaried workers, civic groups, and labor unions are pushing for the government to overhaul its separate pension schemes for government workers, teachers, and soldiers. These funds have been running serious deficits, made up by large government subsidies. According to Health and Welfare Minister Rhyu Si-min, the ministry will unveil plans for their reform by the end of the year.

The controversy over pension reforms comes at a time when Korea is experiencing declining birthrates and an aging population. At the current rate, pension funds are expected to be depleted by 2047.  Some groups from the private sector favor raising the retirement age over reform of the pension system.