2024-04-14 12:57:31
“We must increase the income replacement rate to guarantee retirement life centered on the national pension.” (Professor Yoon Hong-sik, Department of Social Welfare, Inha University)
“Once the funds are exhausted, the premium rate can be up to 35% of income.” (Kim Do-hyeong, professor of economics at Myongji University)
The Public Debate Committee under the National Assembly’s Pension Reform Special Committee began a deliberation debate with 500 citizen representatives participating from the 13th. Last month, the Public Debate Committee proposed ‘Plan 1’, which increases the amount paid (insurance premium rate) from 9% to 13% of income and the amount received (income replacement rate) from 40% to 50%, and the amount paid is increased to 12% and the amount received remains the current amount. The pension reform plan was compressed into ‘Plan 2’, which is maintained. The Pension Special Committee plans to prepare a single plan based on the results of the citizen delegation’s survey after deliberation discussions that will continue until the 21st and push for its passage in the National Assembly next month. However, with the ruling party suffering a crushing defeat in the general election, it is pointed out that it is unclear whether the pension reform, one of the ‘three major reforms’ of the Yoon Seok-yeol government, will proceed as planned.
● “Income security first” vs “Financial stability first”
The deliberation debate will be held four times on the 13th, 14th, 20th, and 21st. At the debate held on the 13th and 14th, experts supporting plan 1, which focuses on ‘income guarantee’, and plan 2, which aims at ‘financial stability’, were sharply opposed to each other over the adjustment of insurance premium rates and income replacement rates, which is the biggest issue.
Nam Chan-seop, a professor of social welfare at Dong-A University who is classified as an ‘income guarantee group,’ said at a debate on the 14th, “The economic activities of women and the elderly are increasing, but that has not been well reflected in financial calculations.” He added, “By 2070, when the baby boomer generation will pass away.” He emphasized, “By 2020, aging will be over, the population structure will be stabilized, and there will be room for finances.” Jeong Se-eun, professor of economics at Chungnam National University, also said, “Increasing the income replacement rate will increase the income of the elderly generation and reduce the burden of supporting the children’s generation. “This has the effect of increasing real income and creating consumption,” he explained.
On the other hand, Kim Do-hyeong, a professor of economics at Myongji University and a member of the ‘fiscal stability faction,’ said, “When the fund is exhausted, the national pension must cover all pension expenditures only with insurance premium income.” “It will approximately triple, and then reach up to 35%,” he pointed out. Seok Jae-eun, a professor at Hallym University’s Department of Social Welfare, also criticized, “Raising the income replacement rate is a reform that will worsen financial sustainability.”
● 76% of the 2030 generation “distrust the national pension”
After completing the discussion until the 21st, the Public Debate Committee will release the results of the citizen representative survey on the afternoon of the 22nd. This includes the support ratio for Plans 1 and 2 and changes in preferences before and after the debate. The final plan for pension reform is decided by the National Assembly’s Pension Special Committee based on the survey results. The National Assembly’s Pension Special Committee and the government plan to attempt to pass the pension reform bill before the 29th of next month when the 21st National Assembly concludes, but it is unclear whether it will actually be passed as about half of the pension special committee members, including the ruling and opposition party secretaries, failed to enter the 22nd National Assembly.
Meanwhile, a survey showed that 7 out of 10 people in their 20s and 30s distrust the national pension due to population decline and concerns about fund depletion. According to a report published by the Korea Women’s Policy Institute on the 14th, 75.6% of respondents answered that they distrust the national pension system. Among respondents, 89.3% cited ‘the insurance premiums expected to continue to rise due to population decline’ as the biggest reason for concern. 86.3% said, ‘I think the amount I will receive in retirement will be too small,’ and 82.6% said, ‘I think I will not be able to receive the national pension in retirement because the national pension is depleted.’
Reporter Cho Yu-ra [email protected]
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2024-04-14 12:57:31