[Exclusive] "If They Go to China, Death Goes Undetected"... National Pension Funds Leak as Foreign Beneficiaries Remain 'in the Dark'

Loopholes in the National Pension System ② Effectiveness of Monitoring Post-Departure Remains Low

Rare Use of the App; Simple Email or Fax Submission of Documents Suffices

Income Verification Not Possible—'Reduction for High Earners' Only Ap

"If someone leaves for China and passes away, it is difficult to detect this immediately. Even if fraudulent pension payments are identified, there is no effective way to recover the funds. That is the reality."

As the deferred National Pension Service payment system and the dependent family pension scheme for foreigners are placed under scrutiny, it has been found that it is challenging to promptly identify changes to pension rights once foreign recipients return to their home countries. Even if eligibility conditions change due to events such as death or divorce, the National Pension Service lacks an administrative network for immediate verification, which raises concerns about possible fraudulent payouts. Furthermore, even if fraudulent payments are detected later, there are limitations in recovering pensions from foreigners residing overseas. This situation has prompted calls for a comprehensive overhaul of the post-payment management system of the National Pension Service.

Annual Document Verification...Foreign Recipients Remain 'in the Dark'

According to the National Pension Service on August 28, the agency verifies changes in pension rights once a year for both foreign and Korean pension recipients living overseas. This process checks not only the survival status of recipients, but also changes such as divorce or separation that can affect eligibility for the dependent family pension. However, critics argue that the current procedures are insufficient for real-time monitoring of overseas recipients’ status. Beneficiaries must verify their identity through a biometric authentication feature in the remote pension verification application or submit supporting documents via email or fax. However, according to the agency, almost no foreign recipients actually use the remote app. Moreover, identity verification documents such as a copy of one's passport, driver's license, or a form of national ID issued in the home country, as well as residency certificates issued within the last 3 months, can easily be submitted by family members on behalf of the recipient. Dependent family pension recipients only need to submit a residency certificate.

As a result, unless the recipient or their family voluntarily reports changes, there is a lack of safeguards to detect events such as death or divorce for up to one year until the next verification point. An official from the National Pension Service said, "For domestic residents, deaths can be detected relatively quickly through connections with administrative information systems, but for those living overseas, significant delays are inevitable as the administrative systems differ by country and it can take a long time for notifications of death or divorce to reach Korea." The official added, "In such cases, old-age pensions or dependent family pensions may continue to be paid in the name of a deceased recipient, or survivor’s pension payments may be delayed, which can lead to fraudulent payments."

Citizens are coming and going at the Comprehensive Counseling Office of the Seoul Northern Regional Headquarters of the National Pension Service in Seoul. Photo by Yonhap News

Domestic Income Is Verified, but Overseas Income Remains in a 'Regulatory Blind Spot'

Overseas recipients may also fall into a blind spot during the process of verifying pension reductions based on income. Old-age pension recipients whose earned or business income exceeds certain thresholds within five years after reaching the pensionable age may see their pension amounts reduced based on their income level. Domestic residents have their income and reduction eligibility immediately checked via integrated tax data from the National Tax Service. In contrast, if a foreign recipient continues to receive the pension while returning to their home country, the National Pension Service has only limited administrative channels for regularly confirming overseas earned or business income. Even if income generated abroad meets the criteria for reduction, it is difficult to detect and verify such cases.

Jeung Eunkyung, Minister of Health and Welfare, is greeting government officials after the 2025 fiscal year settlement plan for related agencies under the standing committee was approved at the Health and Welfare Committee plenary session held at the National Assembly on the 21st. Photo by Yonhap News

Pension Recovery Remains Challenging Even After Fraudulent Payments Are Uncovered...The Ministry of Health and Welfare Reviews Systemic Improvements

Even after fraudulent payments are discovered, difficulties remain. The current National Pension Service Act stipulates that if pension benefits have been wrongfully received due to delayed or false reporting, the amount paid must be recovered with accrued interest, and offenders may be sentenced to up to 3 years in prison or fined up to 30 million won. However, if the recipient is a foreign national who has already returned home, actual recovery is extremely challenging. It is not easy to trace property or income or to enforce collection procedures as is possible with domestic residents. With the number of foreign subscribers and recipients increasing, concerns are growing that the weaknesses in overseas management and recovery could lead to fiscal losses for the National Pension Service.

A Ministry of Health and Welfare official stated, "We are reviewing ways to improve related benefit systems and post-payment management to ensure that there are no loopholes resulting in benefits being improperly paid to overseas recipients," adding, "We will move swiftly to revise relevant laws and guidelines and to push forward systemic improvements."

This content was produced with the assistance of AI translation services.