"To Raise the National Pension Eligibility Age... Improve the Quality of the Labor Market for the Elderly"

National Pension Expert Forum... Seeking Solutions for Financial Stabilization Including Insurance Premium Rate Increase

National Pension Service / Photo by Asia Economy DB

[Asia Economy Reporter Jo In-kyung] The "National Pension Expert Forum," jointly hosted by the Ministry of Health and Welfare and the National Assembly Special Committee on Pension Reform and organized by the National Pension Research Institute, was held at 2 p.m. on the 8th at the Seoul Southern Regional Headquarters of the National Pension Service.

The National Pension Expert Forum is being promoted to verify accurate facts on topics where experts have differing opinions amid the full-scale discussions of the 5th National Pension financial calculation, and to lay the foundation for discussions on improving the National Pension system. Since its inception in September, it has held discussions on the relationship between the Basic Pension and the National Pension, as well as issues regarding the National Pension income replacement rate.

The forum was attended by Lee Ki-il, 1st Vice Minister of Health and Welfare; Kwon Moon-il, President of the National Pension Research Institute; Hong Baek-ui, Professor at Seoul National University; and Lee Tae-seok, Team Leader at the Korea Development Institute (KDI), and was organized as a venue to review solutions for the "National Pension Financial Stabilization Plan." In particular, not only internal improvement measures such as increasing the contribution rate but also improvements in the labor market to secure the working-age population were discussed together.

In the first session, "Measures for Financial Stabilization of the National Pension," Yoo Ho-seon, Research Fellow at the National Pension Research Institute, presented a financial stabilization scenario considering various factors such as the acceptable upper limit of the contribution rate and the lower limit of benefit levels through his discussion paper. Research Fellow Yoo emphasized the need for an appropriate increase in the contribution rate for financial stabilization, stating, "If the contribution rate is gradually increased to 15%, the depletion of the fund, which was expected in 2057 according to the 4th financial calculation, can be delayed until as late as 2073." He also proposed financial stabilization measures such as adjusting the pension eligibility age and introducing automatic adjustment mechanisms by reviewing overseas cases, including the European Union's average pension receipt age of 68.

In the second session, "Labor Market Reform Tasks to Enhance the Sustainability of the National Pension," Lee Tae-seok, Team Leader at KDI, presented the current status of the domestic older labor market and desirable policy directions, proposing labor market reform tasks necessary to raise the pension eligibility age. Team Leader Lee stated, "The main retirement age for jobs in Korea is around 50 or 55, which is lower than the legal retirement age of 60, and there are significant differences depending on gender, education level, industry, and job type." He emphasized, "While discussions on extending the retirement age are meaningful, improving the quality of the older labor market should be the main policy task. To this end, joint efforts by labor, management, and government are essential to extend employment tenure through innovations in corporate personnel management systems such as job-based wage systems and prohibition of age discrimination by job, and to improve productivity among older workers."

Lee Ki-il, 1st Vice Minister of Health and Welfare, said, "Due to the rapid low birthrate and aging population, enhancing the sustainability of the National Pension is an urgent and critical task that can no longer be postponed. In particular, the decrease in the working-age population caused by aging is an important factor that greatly affects the national economy." He added, "To achieve a win-win pension reform, we will continue to create forums that listen to the opinions of experts and the public and actively cooperate with the National Assembly Special Committee on Pension Reform."