National Pension Overpayment Surpasses 1.5 Trillion Won

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Overview of Overpayment Issues in the National Pension System

Over the past five and a half years, the Korean National Pension system has faced significant challenges related to the incorrect collection of insurance premiums. According to recent data, approximately 1.5 trillion Korean won in premiums were collected erroneously, leading to additional administrative costs that reached around 1.9 billion Korean won.

The data was obtained through a request by Han Ji-a, a member of the People Power Party on the National Assembly’s Health and Welfare Committee. The information came from the National Pension Service and the National Health Insurance Service, revealing a growing trend of overpayments in the system.

Key Details on Overpayment Cases

From 2020 up to June of this year, there were 1,984,000 cases of overpayment, totaling 1.541 trillion Korean won. These overpayments occur when subscribers pay their premiums more than once or when they pay an amount that exceeds what is required due to errors. Additionally, late reporting of changes in eligibility—such as resigning, changing jobs, or suspending a business—can also lead to overpayment situations.

The number of overpayment cases fluctuated slightly each year:

  • 2020: 341,000 cases
  • 2021: 339,000 cases
  • 2022: 350,000 cases
  • 2023: 363,000 cases
  • 2024 (last year): 357,000 cases
  • First half of 2025: 234,000 cases

The total amount of overpayments also increased over time:

  • 2020: 224.5 billion Korean won
  • 2024 (last year): 322.8 billion Korean won
  • First half of 2025: 153.2 billion Korean won

Despite these figures, not all overpaid amounts were returned to subscribers. Specifically, 170,000 cases involving 70.4 billion Korean won were not returned. In 2020, 5,000 non-returned cases totaling 10 billion Korean won became permanently unrecoverable due to the expiration of the statute of limitations under the National Pension Act.

Administrative Costs and Refund Procedures

When overpayments occur, subscribers are typically provided with refund application guides. However, the process of correcting these errors incurs significant administrative costs. Over the past five and a half years, the total administrative expenses related to overpayments amounted to 1.884 billion Korean won.

These figures highlight the need for improved systems to prevent such errors and streamline the refund process. Rep. Han Ji-a emphasized that while many overpayments result from subscribers’ delayed reporting, institutional improvements are essential to address the recurring nature of these issues.

Steps for Improvement

To reduce the occurrence of overpayments and ensure timely refunds, several measures could be considered:

  • Enhanced Communication: Improving communication channels between subscribers and the pension service to ensure accurate and timely reporting of changes.
  • Automated Systems: Implementing more robust automated systems to detect and correct overpayments before they escalate.
  • Public Awareness Campaigns: Educating subscribers about their responsibilities and the procedures for reporting changes in eligibility.
  • Legal Reforms: Reviewing the statute of limitations to allow for more flexibility in recovering overpaid funds.

By addressing these issues, the National Pension system can become more efficient, transparent, and fair for all subscribers.

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