Reductions linked to national pension triple over five years, hitting more than 840,000 recipients

Eight in 10 affected recipients receive less than 1 million won a month in national pension

Lawmaker Nam In-soon calls for overhaul of reduction system and redefined roles for the two pension schemes

National Pension Service [Yonhap]
National Pension Service [Yonhap]

Basic pension payments cut because recipients also receive the national pension have exceeded 2.8 trillion won ($2.11 billion) over the past five years, according to newly released government data. The number of people subject to the reductions more than doubled in four years, and eight in 10 of those affected receive less than 1 million won a month from the national pension — placing them squarely in the low-income bracket.

Under the national pension-linked reduction system, recipients whose national pension payments exceed 150 percent of the basic pension reference amount have their basic pension reduced on a sliding scale based on how long they contributed.

The system was introduced in 2014 in the name of benefit equity, but it has drawn persistent criticism for penalizing diligent contributors — the longer a person paid into the national pension, the more their basic pension is cut. As of 2025, any recipient collecting more than 514,000 won a month from the national pension faced a reduction in their basic pension.

Total reductions triple in 5 years; 1 in 5 dual recipients affected

Data submitted by the Ministry of Health and Welfare to Democratic Party of Korea lawmaker Nam In-soon of the National Assembly's Health and Welfare Committee show that the total amount cut from basic pensions under the national pension-linked reduction system jumped from 300.1 billion won in 2021 to 892.5 billion won in 2025 — roughly a threefold increase. The cumulative total cut over the five years from 2021 to 2025 reached 2.83 trillion won.

The number of people whose basic pension was reduced jumped 116.5 percent, from 389,000 in 2021 to 842,000 in 2025. By comparison, the total number of people receiving both the basic pension and the national pension grew 40.7 percent over the same period, from about 2.65 million to about 3.73 million — meaning the pool of those facing cuts expanded far faster than the overall dual-recipient population.

As a result, the share of dual recipients subject to the linked reduction climbed every year.

The proportion rose from 14.7 percent in 2021 to 16.6 percent in 2022, 18.6 percent in 2023 and 20.5 percent in 2024, reaching 22.6 percent in 2025. More than one in five elderly people drawing both pensions is no longer receiving their full basic pension entitlement.

As of 2025, those subject to the national pension-linked reduction had their basic pension cut by an average of 96,000 won a month. After the reduction, they received an average basic pension of 214,000 won — more than 70,000 won less each month than the 287,000 won average received by all dual recipients, including those not subject to any cut.

80% of those penalized receive under 1 million won a month — low-income earners bear the brunt

The central concern is that the vast majority of those facing reductions are low-income recipients drawing modest pension amounts.

A breakdown by national pension income bracket for 2025 shows that of the 842,000 people subject to reductions, 678,000 — or 80.5 percent — receive 1 million won or less a month from the national pension. Those receiving 700,000 won or less, considered the most vulnerable, numbered 390,000, accounting for 46.3 percent of the total.

Looking at the detailed breakdown by bracket, the largest group — 206,000 people — fell in the range of more than 500,000 won to 600,000 won or less, with an average cut of 34,000 won. Those receiving more than 600,000 won to 700,000 won or less numbered 184,000, with an average reduction of 80,000 won; the 128,000 in the more than 700,000-to-800,000-won range faced an average cut of 103,000 won; the 92,000 in the more than 800,000-to-900,000-won range saw an average reduction of 120,000 won; and the 68,000 receiving more than 900,000 won to 1 million won or less had an average of 134,000 won deducted.

Among those receiving more than 1 million won, 49,000 in the more than 1 million-to-1.1 million won range faced an average cut of 144,000 won; 36,000 in the more than 1.1 million-to-1.2 million won range, 152,000 won; 26,000 in the more than 1.2 million-to-1.3 million won range, 157,000 won; 18,000 in the more than 1.3 million-to-1.4 million won range, 162,000 won; 12,000 in the more than 1.4 million-to-1.5 million won range, 166,000 won; and 23,000 receiving more than 1.5 million won faced an average reduction of 170,000 won.

"We must analyze the actual reduction figures by income bracket and assess the effectiveness of retirement income protection, so that contributors who faithfully paid their premiums do not feel penalized," said Nam In-soon. "On that basis, we need to redefine the respective roles of the basic pension and the national pension and draw up a plan to reform the reduction system."


thlee@heraldcorp.com