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| The entrance of a branch office of state-run retirement pension operator National Pension Service (NPS) in Seoul's Jongno District, Jan. 23. Korea Times file |
By Yi Whan-woo
The government and the National Assembly are at odds over what measures should be prioritized in the overhaul of the state-managed retirement pension system to prevent pension funds from being depleted in the decades to come.
Operated by the National Pension Service (NPS), the pension is receivable by the majority of retirees who paid premiums to the service during their working years.
Certain professions, such as civil servants, military personnel and private school teachers, are excluded as NPS pension beneficiaries as they are subscribed to their own pension system.
The estimated time for the depletion of the NPS fund is accelerating in the face of a rapidly aging society.
Accordingly, the Yoon Suk Yeol administration has forwarded its schedule to submit the draft plan on pension reform to the parliament from October to the first half.
Sources familiar with the reform plan said the government has been focusing on readjusting the premium rate, average income replacement rate and minimum age of pension payout.
Such focus on reform was also witnessed during the Kim Dae-jung administration (1998-2003) and the Roh Moo-hyun administration (2003-2008).
However, members of the National Assembly's special committee on pension reform said Wednesday that the focus should be on restructuring pension systems that are exclusively for certain interest groups, before overhaul of the NPS' more comprehensive retirement pension system.
"Those interest groups include civil servants, military personnel and private school teachers, and the committee members reached a consensus to prioritize on restructuring their respective pension systems," the committee said.
The committee noted such special pensions and the NPS pension "are interlinked one way or another" and that clearing any issues of conflict will be crucial to carrying out the NPS pension reform successfully.
A member of the committee, ruling People Power Party (PPP) lawmaker Kang Gi-yun, said, "Whether to adjust premium rates, average income replacement rate and minimum age of pension payout in relation to the NPS fund can wait."
In its latest forecast on the NPS fund in January, the government brought forward the estimated time for depletion from 2057 to 2055.
It said the fund will reach its peak at 1,755 trillion won ($1.39 trillion) in 2040 and start posting shortfalls in 2041 before it completely runs out in 2055.
The premium rate currently stands at 9 percent and the average income replacement rate is at 40 percent.
The minimum age for pension payout will be raised to 65 by 2033, up from the current 62 this year.
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