Employers' unpaid pension premiums leave 134,616 Korean workers short of a monthly pension

Multiply the 1,503,427 by the reported average loss per worker and the pension records are missing about 10.5 million months of work ^[1][2][12]. Only 134,616 of those workers, about 9%, would cross the 10-year minimum for a monthly pension if the arrears were counted ^[3][4][13]. The other 1,368,811 are counted as losing months, but the data supplied do not say what that costs them in benefit ^[14]. The two figures are also different kinds of number: the 1.5 million counts anyone who lost credit at some point as of September, and the 134,616 are described as currently short ^[1][4].

The split inside the 134,616 sets the price of any fix. The 56,883 at 119 months are 42% of the group ^[16], and the other 77,733 are two or more months short ^[15]. In a one-month case the fund's exposure is the premium, or rather the monthly pension that one premium unlocks. In our view that is where the burden on pension finances would sit, the first reason the NPS gave when it said crediting workers first needs careful review ^[10]. The objection holds only if the fund cannot collect the arrears from the employer afterward. The second reason it cited, fairness toward those who paid in full ^[10], does not depend on any of these numbers.

Rep. So Byung-hoon of the Democratic Party of Korea, who obtained the NPS data and sits on the National Assembly's Health and Welfare Committee, wants credit assigned to workers first ^[1]. He said it is "unreasonable that workers who have done nothing wrong should bear the risk of losing their retirement pension simply because an employer failed to pay premiums, when the legal obligation to pay rests with the employer." ^[11] The measures the NPS lists as under review include broader criteria for disclosing the identities of employers with large or habitual arrears ^[10]. A published list of employers adds no months to a worker's record.

Two outcomes follow from where the review lands. If credit goes to workers first and the fund pursues employers afterward, the 56,883 one-month cases are fixed at once and the fund carries the collection risk. If the review stops at disclosure, the 134,616 stay short until their employers pay. We would be wrong about the finance burden if the NPS recovers most arrears from employers quickly, and wrong about the scale of the harm if most of the 1,503,427 have since been made whole, in which case the 134,616 is the better measure of who is hurt today.