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A loophole in Korea's foreigner pension system has sparked controversy recently. Reports have emerged that foreigners could make extensive retroactive contributions after only a brief period of residence, raising concerns about the sustainability of the National Pension System. This issue has been intertwined with ongoing worries about the long-term viability of the pension system in Korea.
President Lee Jae Myung first raised the issue in late August, questioning whether it was appropriate for foreign nationals to be allowed to make extensive retroactive contributions after only short periods of residence. He ordered officials to tighten the rules regarding this matter. A government review found only three foreign nationals who matched the discussed pattern of contributing for one month followed by 119 months of retroactive payments, with only one currently receiving an old-age pension.
President Lee emphasized that the small number of cases does not change the principle at stake. He pointed out that flaws in the pension system should be addressed for everyone, not just foreign subscribers. In response, pension authorities are tightening residence checks for foreign applicants and examining broader changes to the retroactive payment system for both Koreans and foreigners. The government aims to implement better verification methods to resolve the underlying issues.