Minister of Health and Welfare Cho Kyu-hong repeatedly emphasized the need for pension reform at the National Assembly Special Committee on Pension Reform.
Minister Kyu-Hong Cho said at the National Assembly, "The sustainability crisis is emerging due to concerns about the depletion of the national pension fund due to the declining birthrate and aging society and the increase in the financial burden of the basic pension." .
In the work report data submitted by the Ministry of Health and Welfare to the National Assembly, issues and tasks of pension reform include adjustment of the insurance premium rate, which is currently at 9%, raising the age of receipt of benefits from 62 years old, adjustment of the income replacement rate of the national pension, which is currently 40%, and linking discussions on the basic pension. etc. are included.
The national pension premium rate of 9% is about half of the average premium rate of 18.2% of the Organization for Economic Cooperation and Development. However, an increase in the insurance premium requires a wide range of social discussions as the interests between labor and management are complicated and the burden on the people inevitably increases.
It started at 3% in 1988, the first year of the implementation of the national pension, and rose to 9% in 1998, but since then, social consensus has not been reached, so it has remained in place for 24 years.
In addition, as life expectancy increases and the pension payment period lengthens, the need for a retirement age has increased, and the OECD has also recommended that the retirement age be raised.
The Ministry of Health and Welfare also mentioned the need to adjust the income replacement rate.
Currently, the income replacement rate for an average income earner who has been in the national pension for 40 years is 40%, but the average enrollment period is short at 18.7 years, so the real income replacement rate is only 22.4% as of 2020.
The Ministry of Health and Welfare, however, took a reserved position, saying, "There is a conflict between the argument that the income replacement rate should be raised to ensure an appropriate level of wages and the position that it should be maintained or reduced considering financial stability."
Previously, President Yoon Seok-yeol mentioned pension reform in the direction of 'pay more and receive less' during his elected days.
Kim Tae-hyun, chairman of the National Pension Service, suggested a 'pay more and receive more' method in a government audit last October, saying that not only financial soundness but also strengthening of old-age income security is needed.
(Photo = Yonhap News)