Shaking the Pillars of Security: Why Pension Reform Plans Must Be Reconsidered
- The Ministry of Health and Welfare held the National Pension Deliberation Committee on September 4, 2024, to discuss the pension reform implementation plan.
- The government's plan for pension reform ignores the National Pension Guarantee in the first place.
- Most people are demanding that pensions be increased instead of insurance premiums.
Opposition to Pension Reform Plans Undermining National Pension Foundations
National Federation of Democratic Trade Unions
September 4, 2024
The Ministry of Health and Welfare held the National Pension Deliberation Committee on September 4, 2024, to discuss the pension reform implementation plan. The National Pension Deliberation Committee is a committee prescribed in the National Pension Act, where consumer representatives participate and deliberate on major issues related to the pension system.
The government’s plan for pension reform ignores the National Pension Guarantee in the first place. The current insurance premium rate is 9%, and the government plans to increase it to 13%. However, the income replacement rate, which is the benefit rate, has been implemented this year at 42%, and the government plans to maintain it at 42%. It is not clear on what basis this was presented.
Most people are demanding that pensions be increased instead of insurance premiums. At the Public Deliberation Committee of the National Assembly’s Special Committee on Pension Reform in January, citizen representatives discussed insurance premium rates and agreed on a plan to increase the income replacement rate to 50% or 56%.
The government’s plan also proposes a differential insurance premium rate increase according to age, which undermines the principle of intergenerational solidarity in the pension system. The National Pension works as a pension because it stores real value. If the real value is not saved, it loses its value as a pension.
The government’s pension reform plan ignores the main purpose of the national pension, which is to guarantee retirement income. It is a reform plan that shakes the foundations of the system, destroys solidarity between generations, and opposes the Korean Confederation of Trade Unions government plan.
The National Federation of Democratic Trade Unions opposes the government’s pension reform plan and demands a plan that prioritizes the guarantee of retirement income and maintains solidarity between generations.