This study analyzes inter- and intra-generational equity and long-term financial stability of the national pension in Korea. Equity analysis implies future financial instability because the pension system provides more benefits than contributions. And the pension system suffers equity problem because of substantial under-reporting of income of locally-insured persons. We then construct an actuarial projection model to have an idea about the magnitude of future financial burden implied by the equity analysis and propose some options for future pension reforms. The model accommodates new population projection based on 2000 census and the parameters are set to reflect the fundamental changes of Korean economy after 1997 financial crisis. According to the projections, the pension expenditures rise rapidly because of maturization of the system and accelerated ageing but the contributions show limited growth. So the expenditures exceed the contributions in 2025 and the sum of contributions and investment profits of the pension fund in 2039. The pension fund are expected to shrink from 2039 and deplete in 2049. Annual deficit of the pension system would be more than 25% of government budget and is expected to increase rapidly in the 2050s. So there's little possibility of sustaining current pension system by the government subsidy. And the results are insensitive to the change of major socio-economic assumptions. Therefore, future pension reform has to correct current equity problem arisen from under-reporting of income of locally-insured persons and restore financial stability of the pension system. Considering the overall social security contributions and the life-cycle of the pension system, we recommend benefit cut for financial stability rather than considerable increase of contribution rate and separate application of redistributive factor in benefit formula for locally-insured persons.