A dark cloud has fallen over the pension reform, one of the ‘three major reforms’ of the Yoon Seok-yeol administration . The ‘National Pension Comprehensive Operation Plan’, which is established every five years as a government-level pension reform plan, was announced on the 27th, but the core insurance premium rate and income replacement rate (pension amount compared to average income during the subscription period) adjustment plan was left ‘blank’. Concerns that the momentum for pension reform will weaken ahead of the 22nd National Assembly election (general election) in April next year are gradually becoming a reality.
Is it because of the burden of carrying a gun before the general election?
The 5th National Pension Comprehensive Operation Plan, which the Ministry of Health and Welfare held and reviewed at the National Pension Deliberation Committee on this day, contains directions for adjusting the insurance premium rate and income replacement rate, but does not contain specific numbers. This is why questions are being raised about the government’s will to reform pensions, and some are even responding that it is a step backwards from the Moon Jae-in administration. Pension reform was not implemented under the Moon administration, but the 4th Comprehensive Operation Plan established at the end of 2018 proposed four specific adjustment plans that combined the insurance premium rate and income replacement rate targets.
As the task of adjusting the burden and benefits of the national pension, to which more than 22 million people subscribe, is directly related to ‘vote sentiment,’ some say that the government ultimately came up with a ‘hard-core reform plan’ due to the political burden before the general election. Insurance premium rates and income replacement rates, which determine the timing of pension fund depletion and retirement income, are particularly sensitive factors in pension reform. The National Assembly’s Pension Reform Special Committee was unable to come up with a pension reform plan scheduled for April this year due to conflict among members of the private advisory committee, and turned to discussions on structural reform. The Financial Calculation Committee, an advisory body to the Ministry of Health and Welfare, also clashed over whether to increase the income replacement rate during the process of preparing the final report, leading to the resignation of two private members. The Ministry of Health and Welfare postponed all sensitive decisions, such as adjusting insurance premium rates and income replacement rates, saying, “We will go through public discussion with the National Assembly.” The calculation was that they would accept immediate criticism and share responsibility rather than ignite a sharp conflict with specific figures. It seems to have worked.
The basic pension, which was discussed along with the national pension reform, is interpreted in the same context as the government’s announcement of its intention to pursue it as set out in the national agenda. Many experts emphasized the need for reform in the direction of reducing the number of beneficiaries, with the Financial Calculation Committee stating in카지노사이트 its final report, “We need to review the transition from the target benefit rate method for the bottom 70% of income to the method of selecting beneficiaries based on certain criteria.” However, this plan was not included in the comprehensive operation plan. The Ministry of Health and Welfare plans to gradually increase the basic pension to 400,000 won in connection with the national pension reform.
Criticism pouring in on the ‘Maengtang Reform Plan’
Minister of Health and Welfare Cho Kyu-hong said of the reform plan that was missing the ‘meat’, “The government has been trying to persuade the people by presenting insurance premium rates and income replacement rate levels, but it has not been successful. This time, rather than presenting numbers, we will work with the people.” “I thought it would be desirable to create it,” he explained. Minister Cho cited the connection with the structural reform being discussed by the National Assembly’s Special Committee on Pensions and the need to reflect future population estimates that will be released soon as reasons for delaying detailed drafting.
Civil society groups all came forward to criticize the government. The People’s Action to Strengthen Public Pension, formed by about 300 civic groups, said, “This is a bullshit pension reform plan that contains no key numbers and only repeats that discussion is necessary. The Yoon Seok-yeol government, which avoids responsibility for pension reform, is not qualified to be a government.” criticized. The People’s Solidarity for Participatory Democracy also likened the government’s reform plan to an ’empty cart without a blueprint for retirement security’ and said, “We strongly urge the public to make clear policy promises so that insurance premiums are not burdened beyond a bearable level and to increase public trust in the sustainability of the national pension.” “I demand it,” he said.
Seok-myeong Yoon, a researcher at the Korea Institute for Health and Social Affairs, who participated in the Financial Calculation Committee, said, “There are some noteworthy aspects, such as collecting public opinions on automatic stabilization devices, etc., but it is unfortunate that experts were unable to present a figure for increasing the insurance premium rate on which a consensus was reached.” He said.
