Regarding reports that the private advisory committee belonging to the Special Committee on Pension Reform of the National Assembly is reviewing a draft pension reform that will gradually increase the national pension insurance premium rate to 15%, the government expressed its cautious position, saying, "It is not a government proposal."
Minister of Health and Welfare Cho Kyu-hong held an unexpected briefing on the afternoon of the 30th and said, "The plan for a gradual increase in the national pension insurance premium rate of 15% reported today is not a government proposal."
Minister Cho said, "The government is supporting the discussion by providing the results of calculations of fiscal estimates at the request of the National Assembly Special Committee on Pensions and the Private Advisory Committee, but it is not directly involved in the discussion." Based on the results and fully reflecting the opinions of the people, we plan to establish a comprehensive national pension management plan in October this year in accordance with the National Pension Act and submit it to the National Assembly.”
The national pension insurance premium rate has remained at 9% for 24 years since the first pension reform in 1998 due to a failure to reach a social consensus.
As the demographic structure is rapidly changing, such as low birth rate and aging population, the need for pension reform is increasing for the sustainability of the national pension.
The briefing is interpreted as an expression of concern that the discussion on pension reform may be entangled from the start if the plan is mistaken for the government's intention as specific figures are mentioned in a situation where the government has not even started the discussion in earnest.
Minister Cho also emphasized that "even after (establishing the comprehensive management plan), we plan to continue our social consensus efforts to legislate the reform plan."
Previously, at a two-day meeting on the 27th and 28th, the private advisory committee discussed a draft pension reform by adjusting core variables of the national pension, such as the income replacement rate (ratio of pension receipts to average lifetime income) and insurance premium rate. It is said that the plan to raise the income replacement rate from 40% to 50% at the same time as raising it to 15%, and to raise only the insurance premium rate to 15% and leave the income replacement rate at 40% were considered influential.
When an agreement could not be reached on the two proposals, an arbitration proposal (insurance premium rate 9% → 15%, income replacement rate 40% → 45%) was presented, but it is known that the private advisory committee was unable to come up with a draft due to differences in position.
(Photo = Yonhap News)