South Korea’s monthly national pension payouts have surpassed 4 trillion won ($2.9 billion) for the first time, highlighting growing fiscal pressure on the pension system amid an aging population and declining births.

According to data released by the National Pension Service (NPS) on Sunday, pension payouts reached 4.02 trillion won in February, up 77.5 billion won from the previous month. This is the first time monthly payouts have crossed the 4 trillion won mark.

For the full year, total payouts are projected to reach around 50 trillion won.

Pension payouts have been rising at an accelerating pace. Annual payouts totaled 11.55 trillion won in 2012, surpassed 20 trillion won in 2018, climbed to 34.02 trillion won in 2022, and jumped to 43.7 trillion won last year.

Meanwhile, the number of contributors paying insurance premiums is on the decline.

After peaking at 22.5 million in 2022, the figure dropped to 22.38 million in 2023 and fell further to 21.98 million as of February. This year alone, the contributor count has declined by 167,000.

In contrast, the number of pension recipients continues to grow rapidly. The total reached 7.37 million this year, an increase of approximately 550,000 from a year earlier.

Although premium income still exceeds benefit payments, the current trajectory suggests the crossover point is approaching if the trend persists.

A mid-term fiscal outlook released last year by the NPS Research Institute projects that pension payouts will rise from 51.96 trillion won this year to 59.57 trillion won in 2026 and 67.07 trillion won in 2027.

During the same period, insurance premium income is forecast to grow more moderately, from 62.02 trillion won in 2025 to 63.21 trillion won in 2026 and 64.35 trillion won in 2027.

By 2027, payouts are expected to exceed premium income by more than 3 trillion won.

Beginning in January next year, the contribution rate is expected to rise by 0.5 percentage points annually under a revised law, which is expected to bolster income. However, with pension spending climbing rapidly, a reversal where expenditures overtake income is seen as inevitable, experts noted.

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