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By Yi Whan-woo
The younger the taxpayers are, the more they will pay over time and the longer they will have to wait to receive their retirement pensions.
That idea was brought up this week during a National Assembly-driven discussion, as the country's population is dwindling and aging rapidly, and it is feared that the state-run pension fund will be depleted by the 2050s.
The discussion arose as politicians are increasingly aware of the seriousness of the pension fund's foreseeable depletion, but were reluctant to suggest bold solutions for fear of losing votes, especially from younger voters.
Under the circumstances, the advisory committee, operating under the wing of the Assembly's special committee on pension reform, reached the consensus that taxpayers should pay more in premiums while waiting longer before starting to receive their pensions.
The 16-member advisory committee consists of macro-economists, sociologists and other relevant experts in the private sector.
They jointly concluded that the National Pension Service (NPS), the state-run pension operator, should hike the premium rate from the current 9 percent, and also the receivable pension amount in proportion to their income prior to retirement from the current 42.5 percent.
Political circles have been divided over whether to increase the premium rate or the receivable pension proportion.
The 16 experts did not specify how high to raise the premium rate and the receivable pension proportion.
Rep. Joo Ho-young, the floor leader of the ruling People Power Party (PPP), who also heads the Assembly's special committee on pension reform, noted the current average monthly pension amount of 580,000 won "falls far short of guaranteeing a secure and stable life after retirement."
"And hopefully the consensus can help taxpayers better in planning for their retirement," he said.
Another conclusion jointly made by the experts was that taxpayers should be eligible to receive their pensions at age 68, up from the current 65.
The advisory committee assessed that raising the eligibility age by three years may delay the depletion of the pension fund possibly by two years from the currently estimated year of 2057.
Concerning whether taxpayers will earn money and afford to pay premiums through the age of 65, the advisory committee said it will "seek measures for senior citizens to land jobs."
Those aged 60 were eligible for retirement pensions in 1988 when the pension system was introduced and life expectancy in Korea was only 70.
Over the past 35 years, life expectancy in Korea increased by more than 13 years to 83.6 while the age of eligibility rose by merely five years.
The policy makes it tough for the NPS raise the total sufficient funds to make pension payments, especially considering that Korea has the world's lowest birthrate, resulting in fewer people to pay premiums as well as more people who will need to receive pensions.
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