The impact of South Korea’s demographic crisis is far-reaching, with one lesser-known consequence being the threat to the sustainability of the teachers’ pension system.

As the school-age population shrinks and schools close, teachers are losing their jobs and becoming legally eligible for pension payouts much earlier than expected — sometimes as early as their 30s.

According to data released by the National Assembly Budget Office, 410 pension recipients became eligible prematurely due to school closures as of 2024. Among them, individuals in their 30s and 40s account for 16 percent.

It was the first time that the number of early recipients surpassed 400 since the pension program was introduced in 1975 as a mandatory scheme providing financial security for private school teachers and staff in Korea.

Of the 410, recipients in their 60s and older comprised the largest share with 196, followed by 149 in their 50s. The remaining 65 recipients were younger — 63 in their 40s and two in their 30s.

“The financial sustainability of the Teachers’ Pension fund is already in question, and early pension payouts due to school closures will further strain future finances,” a NABO official said.

Statistics Korea projections indicate the number of children ages 6 to 21 will decrease further from 6.97 million in 2025 to about 4.1 million by the early 2040s. After a slight rebound in the early 2050s, the decline will continue.

The NABO financial outlook warned that without systemic changes, the teachers’ pension fund will run a deficit by 2028 and be depleted by 2042.

Read more @koreaherald