The Korean pension system is at an important turning point. Without a systemic reform, the combined spending on public pensions could rise to higher than 10% of GDP by 2040. In order to finance this spending, payroll taxes will have to rise to levels like those now found in the demographically advanced countries of Europe that have chosen to rely primarily on unfunded public pension schemes. The Korean pension system introduced in 1988, however, is still immature and the debt owed to those that have contributed since 1988 is still manageable. A shift to a system less dependent on the government and on high payroll taxes on future generations can still be made comfortably. Such an effective pension reform would be possible by introducing private ‘individual account' system on top of the publicly managed ‘basic' pension. Individual account system is analyzed good enough for enhancing system efficiency of the Korean pension. Possible problems out of introducing individual account system to Korean pension may include transition costs and higher investment risk to workers in the system. There would be costs as well as benefits when we introduce individual account system and we need to develop sophisticated plans of introducing and implementing individual account system to Korean pension.