Pension Experts' Proxy Battle Between Ruling and Opposition Parties... Clash Again After 7 Years

Special Committee on Pension Reform Private Advisory Committee Co-Chairs Yongha Kim & Yeonmyung Kim
'Fiscal Stability' vs 'Old-age Income Security'
Participated as ruling and opposition experts in 2015 civil servant pension reform
Yongha Kim joined Yoon's transition team... Yeonmyung Kim served as social secretary under Moon administration
Pension reform plan to be prepared by January next year

[Image source=Yonhap News]

[Asia Economy Reporter Naju-seok] The National Assembly's Special Committee on Pension Reform appointed Professor Kim Yong-ha of Soonchunhyang University and Professor Kim Yeon-myeong of Chung-Ang University as co-chairs of the private advisory committee, marking a return match after seven years. Regarded as the top pension experts in the country, the two led discussions between ruling and opposition parties in the National Assembly's Public Officials Pension Reform National Grand Compromise Organization in 2015, steering the direction of pension reform. Regarding the overall reform plans for pensions including the National Pension Service, Professor Kim Yong-ha emphasizes financial stability of pensions, while Professor Kim Yeon-myeong focuses on securing retirement income, leading to evaluations of this as a 'ruling-opposition proxy battle.'

They previously participated as private members from both ruling and opposition parties in the National Assembly's public officials pension reform efforts seven years ago. At that time, the ruling and opposition parties debated fiercely over income security and fiscal soundness. The conclusion then was to gradually increase contribution rates while lowering the payout rates.

Professor Kim Yeon-myeong served as the Senior Secretary for Social Affairs at the Presidential Office under the Moon Jae-in administration, while Professor Kim Yong-ha participated as a specialist committee member in the Presidential Transition Committee under the Yoon Suk-yeol administration.

When the pension reform issue resurfaced during the last presidential election, both expressed their visions for National Pension reform to this publication. At that time, Professor Kim Yeon-myeong insisted, "Since pensions should cover the minimum living expenses for single-person households, we need to find ways to raise the income replacement rate to 50%." Professor Kim Yong-ha explained, "The National Pension's income replacement rate (the ratio of pension benefits to average earnings during employment) has already been lowered several times and cannot be reduced further; ultimately, we need to adjust contribution rates or the pension benefit commencement age."

Professor Kim Yeon-myeong believes that pension benefits should be increased from current levels to ensure stable retirement income through the National Pension and others, whereas Professor Kim Yong-ha holds the position that pension amounts should no longer be cut even for fiscal stability reasons, and that sustainable finances should be secured by raising contribution rates or delaying benefit payment timings.

The Pension Special Committee views their relationship not as confrontational but as mutually complementary. A committee official explained, "Both individuals understand the importance of income security and fiscal stability. In the advisory committee, they will not stubbornly insist on their own views but will play a role in exploring how to harmonize these two aspects well."

The private advisory committee plans to formulate the direction of pension reform by the end of the year and submit multiple reform proposals to the special committee in January next year. Going forward, the Pension Reform Special Committee is expected to spend the rest of the year receiving reports on current issues from the advisory committee and government side, then begin full-scale work on drafting pension reform plans starting next year.

Kim Seong-joo, a Democratic Party lawmaker and secretary of the Pension Reform Special Committee, said, "Today, I will propose to the ruling party secretary to regularize meeting schedules," adding, "We will review previously discussed pension reform proposals and proceed with discussions by meeting with labor unions, the Korea Employers Federation, small business owners, self-employed individuals, and small and medium enterprises." Lawmaker Kim explained, "Through the National Assembly's discussion process, there will be nationwide learning and debate, leading to proposals acceptable to both current and future generations," and added, "If such consensus is possible, we will proceed with the legislative process."

During the pension reform process, public pensions such as the National Pension and basic pensions are also expected to be discussed together.