More than 130,000 South Korean workers face the risk of failing to meet the 10-year enrollment requirement for the Old-Age Pension because their employers withheld National Pension premiums from their paychecks but never remitted them. The structural flaw means workers saw money deducted every month yet could end up receiving nothing in retirement.

According to data obtained by Representative So Byung-hoon of the Democratic Party of Korea, a member of the National Assembly Health and Welfare Committee, from the National Pension Service (NPS), as of September this year, 1,503,427 enrollees have a history of not receiving full credit for their enrollment periods due to employer non-payment of premiums. On average, each affected worker lost approximately seven months of credited enrollment.

The National Pension requires a minimum of 10 years (120 months) of enrollment to qualify for monthly Old-Age Pension payments after retirement. However, when employers fail to remit premiums, the periods workers actually worked are not fully reflected in their enrollment records.

The data shows that 134,616 enrollees currently have less than 10 years of credited enrollment but would meet the threshold if their employers’ unpaid periods were counted. Among them, 20,982 are already 60 or older and have entered retirement age.

Particularly striking is that 56,883 enrollees—42.3% of the total—are stuck at exactly 119 months of credited enrollment. These workers would qualify for the Old-Age Pension if just one additional month of their employers’ unpaid premiums were recognized.

By length of unpaid periods, 954,524 workers lost 1–5 months, 323,266 lost 6–11 months, 157,833 lost 12–23 months, and 67,804 lost 24 months or more.

Damage has also been confirmed among those who gave up on receiving pension benefits and instead withdrew their contributions as a lump-sum refund. Between 2023 and June of this year, 2,823 lump-sum refund recipients would have met the 10-year enrollment requirement if their employers’ unpaid periods had been counted, totaling 74,947 months of delinquency.

Employers bear the legal duty, workers bear the loss

The core issue is a systemic contradiction: while the legal obligation to pay premiums rests with employers, workers must shoulder the full burden of lost enrollment credit resulting from delinquency. National Pension premiums are split evenly between employers and workers, with employers deducting the worker’s share from wages and remitting both portions together.

When a workplace falls behind on premium payments, even if workers pay their own share directly, only part of the delinquent period—not the entire period—may be credited toward enrollment. In some cases, workers must cover the employer’s share as well to receive full credit for the delinquent period.

The National Pension Service is aware of the problem. In a written response submitted to Representative So’s office, the NPS stated it “fully sympathizes with the need to provide relief to workers who suffered disadvantages despite having contributions deducted from their wages due to employer delinquency.”

However, the agency took a cautious stance on proposals to prioritize recognizing unpaid periods as enrollment credit. The NPS explained that such measures require review due to the fiscal burden on the National Pension fund and fairness concerns relative to those who faithfully paid their premiums.

The current remedy offered by the NPS merely lowers the threshold for publicly disclosing the names of high-amount, habitual delinquent employers from the current standard of at least one year of delinquency and 20 million won (approximately $15,000) owed to 10 million won (approximately $7,500). Critics argue this falls short of directly protecting workers’ pension rights.

Representative So stated, “The legal obligation to pay National Pension premiums rests with employers, yet it is unreasonable that blameless workers bear the risk of losing their retirement pensions simply because their employers failed to pay.”

He added, “We cannot leave in place a system that demands workers pay again even after confirming that premiums were deducted from their wages. The government must promptly devise effective relief measures—including prioritizing recognition of workers’ enrollment periods and holding delinquent employers accountable—to ensure that workers approaching pension eligibility are not harmed.”

Time for systemic reform

The data exposes gaps in the National Pension premium collection system. Workers can confirm that premiums are deducted from their monthly wages, but it is difficult for them to verify whether employers actually remitted those funds to the National Pension Service, since the payment obligation itself rests with employers.

The case of 56,883 workers stuck at 119 months of enrollment is cited as a representative side effect of the system’s rigidity. A single month’s difference can mean never receiving the Old-Age Pension for life, leaving workers with only a lump-sum refund instead.

The lump-sum refund returns previously paid premiums plus a fixed interest rate—a starkly different outcome from receiving the Old-Age Pension for life in terms of retirement income security.

Experts advise that preventing worker harm from employer delinquency requires reviewing how enrollment periods are calculated, alongside strengthening collection efforts and sanctions against delinquent employers. They note that merely lowering the threshold for public disclosure of delinquent employers, as announced by the NPS, is insufficient to remedy damage that has already occurred.