South Korea's National Pension Service has raised the monthly contribution ceiling and floor for members starting this month [1].
The adjustment ensures the pension system keeps pace with economic shifts and income growth across the workforce. Because the changes target the highest and lowest earners, the vast majority of contributors will not see a change in their monthly premiums.
According to the National Pension Service, the adjustments reflect a 3.4% average income growth among members over the last three years [1]. This growth rate served as the basis for updating the contribution brackets to maintain the fund's sustainability.
For high-income earners, the monthly income ceiling used for calculations has risen to 6,590,000 KRW, up from 6,370,000 KRW [1]. Consequently, individuals earning above this new threshold will pay an additional 29,000 KRW per month [1]. The total monthly premium for these highest earners will now reach 626,500 KRW [1].
Low-income earners are also affected by the updated floor. Members with a monthly income of less than 410,000 KRW will now pay an extra 950 KRW per month [1].
Most contributors remain unaffected by these specific changes. Approximately 86% of members have incomes that fall between 410,000 KRW and 6,370,000 KRW [1]. These individuals will continue to pay contributions based on the standard 9.5% rate [1].
An anchor for YTN News said the updated premiums will be collected for one year, continuing through June of next year [1].
“High-income earners will pay an additional 29,000 KRW per month.”
The adjustment of the pension ceiling and floor is a technical mechanism to prevent the real value of contributions from eroding as nominal wages rise. By indexing these limits to average income growth, South Korea aims to stabilize the National Pension Service's long-term solvency while distributing the burden of increased funding toward those with the highest capacity to pay.
