정책 이슈

In late August 2026, controversy surrounding loopholes in the National Pension System rapidly spread. The core issue was simple. The starting point of the controversy was the retroactive payment system itself. To receive an old-age pension from the National Pension Service, one must have contributed for 120 months (10 years). It was pointed out that the retroactive payment system, originally designed for women with career breaks or low-income individuals, was being exploited by short-term foreign residents who would 'work for one month and pay for 119 months all at once.' Specific examples cited included Chinese nationals on H-2 (visit and work) visas who joined for only one month, then made a lump-sum payment for 119 months at age 60 to receive monthly pensions, and Chinese nationals with permanent residency who paid for only 9 months and then applied for early old-age pensions. Applications for retroactive payments from foreigners increased approximately 20-fold, from 43 cases in 2015 to 848 cases in 2024, with Chinese nationals accounting for an overwhelming proportion. The opposition party launched an offensive, asking, 'Koreans have to pay for 10 years to receive it, but Chinese nationals only need one month?' and demanded a complete overhaul of the eligibility requirements.

The core of the controversy is not 'it's unacceptable because they are Chinese,' but rather that the public finds it difficult to accept a structure where one works for only one month, retroactively pays for 119 months all at once to receive a lifelong pension, and even adds family members abroad as dependents for survivor's pension. President Lee Jae-myung's statement at the Cabinet meeting on August 25, that “we should look from the public's perspective to see if we need to urgently strengthen eligibility requirements by considering the actual period of residence in Korea,” is in the same vein. Kim Sung-joo, chairman of the National Pension Service, also stated that “what is important is not nationality, but how much and for how long one has contributed,” which was intended to establish the substance of contribution and residency as criteria, not nationality discrimination. Therefore, the solution lies not in nationality barriers, but in fixing the period of stay, actual payment period, and the reality of dependency with numbers.

The loopholes in the current system are clear. The old-age pension requires a subscription period of 120 months, and retroactive payments are possible for up to 119 months. If the past period was registered as a foreigner, even if only one month is actually paid, the remaining amount can be paid in a lump sum to meet the 10-year requirement. The dependent family pension is 306,630 won per year for a spouse and 204,360 won per year for each child under 19 or elderly parent, with no limit on the number of people. If strict residency and entry records are not applied to family members living overseas, criticism that 'we are supporting the elderly in China' will be repeated. In addition, Article 126 of the National Pension Act prohibits voluntary enrollment for foreigners, but there is also a legal conflict where the practice of retroactively paying for periods of exemption for spouses without income coexists.

When calculating the period of stay, it should be based on 'actual stay + actual payment' rather than 'from entry date to departure date'. The method of aggregating the number of days of domestic stay according to immigration records, the period of maintaining foreigner registration/residence 신고, and the actual number of months of insurance premium payment, and then using the shortest of the three indicators as the recognized period, reduces manipulation. For example, even if the visa period is 8 years, if the actual stay in Korea is 14 months and the insurance premiums were paid for 1 month, the recognized contribution period is 1 month. Months with only tourist, short-term visit, or simple stay status are excluded, and only months with stay status that allows social insurance enrollment, such as employment, overseas Koreans, permanent residency, or marriage immigration, are counted. If re-entry after departure is repeated, they are combined, but years in which the person was not in Korea for 183 days or more are classified as 'non-resident years' and excluded from retroactive payment for that year, which aligns with the domestic residency requirements discussed in the basic pension.

In practice, the cap on the ratio is key. As proposed by Chairman Kim Sung-joo, if only a certain multiple of the actual payment months is allowed for retroactive payments, the '1 month payment + 119 months retroactive payment' scenario will disappear. For example, if only 3 months (or a maximum of 12 months) of retroactive payment are recognized for every 1 month of actual payment, a person who has worked for one month can only extend their period by a maximum of 4 months. To obtain eligibility for benefits for 10 years, a minimum of several years of actual residency and actual payments will be required. A stronger proposal is to require 36 months (3 years) or 60 months (5 years) of continuous or cumulative actual residency at the time of applying for retroactive payments. 3 years is similar to the waiting period for voting rights for permanent resident foreigners in local elections, and 5 years aligns with the '5 years of domestic residency after age 19' standard that the government considered for basic pensions. For groups with many long-term rotational jobs, such as overseas Koreans (F-4) and H-2 visa holders, allowing cumulative criteria such as 5 years of cumulative residency within 10 years + at least 24 months of actual payments instead of continuous residency can prevent accusations of nationality discrimination while also blocking the one-month scheme.

Dependent family pensions should be handled separately from the individual's retroactive payments. This is because the structure where the beneficiary lives overseas and claims overseas family members is the source of anger. Three layers of supplementary measures are needed. First, dependents must, in principle, be actual residents in Korea or have stayed in Korea for at least 183 days out of the most recent 12 months. Second, the current domestic standard, which only recognizes parents if they share a household on the resident registration (or alien registration), will be applied equally to foreign beneficiaries. Third, for family members residing overseas, additional payments will not be made even with proof of remittance/support, or if paid, only when the beneficiary himself is residing in Korea. It would also be better for both finances and public opinion to set a limit on the number of dependents, such as one spouse + a combined total of two children/parents, rather than an unlimited number.

There are more things to amend and supplement than just the formulas. Starting with the laws, the conflict between the prohibition of voluntary enrollment for foreigners (Article 126) and the practice of retroactive payment for periods of exclusion from coverage needs to be resolved. The scope of periods eligible for retroactive payment should be narrowed to 'periods during which income was earned while employed or residing in Korea, or periods recognized as exceptions to payment,' excluding blank periods where there was only simple foreign registration. In the enforcement decree, it is safer to specify whether eligibility is recognized by visa status, excluding short-term/rotational statuses like E-8 seasonal workers from retroactive payment eligibility. Administratively, a system that cross-references the Ministry of Justice's immigration computer system with the National Pension subscription history on a monthly basis is essential. For foreign public documents (family relations, dependency証明), cross-verification with entry records and domestic addresses, rather than just apostille/consular confirmation, is necessary to reduce false dependency claims. For existing beneficiaries, if a blanket recovery is difficult due to the principle of trust protection, it is more realistic to immediately apply new retroactive payments and new dependent family additions, and for existing additions, to suspend future payments if domestic residency requirements are not met after re-examination.

To avoid controversy over discrimination against compatriots, 'Chinese' or 'specific nationality' should be removed from the text. The criteria should not be nationality, but actual days of stay, actual months of payment, domestic household composition, and visa status allowing social insurance enrollment. The fact that Chinese compatriots are the majority is due to the composition of foreigners residing in Korea, not because of preferential provisions. Conversely, if blocked solely by nationality, long-term employed and contributing compatriots would be excluded altogether, conflicting with overseas Korean policies. Reciprocity also needs to be checked separately. A list of agreement revisions should be created by comparing whether Koreans can work for one month in the other country and make up for 10 years' worth in the same way, and whether they receive overseas family additions.

If only numbers are inserted without financial impact and transitional provisions, another loophole will be created. The National Pension Service should disclose scenarios showing how much the estimated number of beneficiaries and the additional amount for dependents would decrease if the retroactive payment limit is changed to be linked to actual payments. The original purpose of expanding retroactive payment opportunities for young people and protecting spouses with career breaks should be left to Koreans and long-term resident immigrants, while a dual design that only removes 'financial investment using 1 month of subscription history as a stepping stone' is appropriate. Finally, a real residency check during benefit receipt is necessary. If non-residency in Korea is confirmed through an annual immigration check, the additional amount for dependents should be stopped, and the individual's old-age pension should be maintained as much as the contribution, but a line should be drawn by only recovering the additional amount confirmed to be fraudulently registered.

The most consistent solution to reduce controversy is to calculate the period of stay by the intersection of actual days of stay × eligible visa status for social insurance × months of actual payment, allow retroactive payments only as multiples of actual payments, and require domestic cohabitation and actual residency for dependent pensions. Cutting by nationality would be discrimination against compatriots, and loosely including only the period of stay would revive the one-month scheme. What needs to be fixed now is not the object of emotion, but the formula itself, where 1 month turns into 119 months.