Jo Gyu-hong: "National Pension Base Reform Plan to be Submitted by October... Focusing on Premiums and Income Replacement Rate"

Financial Projections Underpinning Discussions to Be Announced This Month
Pilot Operation for AI-Based Crisis Household Identification by Year-End

Minister of Health and Welfare Cho Kyoo-hong is speaking at a briefing after a work report on the 9th. [Photo by Ministry of Health and Welfare]

[Asia Economy Reporter Lee Gwan-ju] On the 9th, Cho Kyu-hong, Minister of Health and Welfare, stated, "The government plans to submit a parametric reform plan focusing on the National Pension insurance premiums and income replacement rate by October this year, in accordance with the National Pension Act."

Minister Cho said at a briefing following a work report held at the Government Seoul Office that regarding pension reform, "We will do our best to closely consult with the National Assembly and achieve social consensus, and include that consensus plan in the operation plan." He added, "If consensus is not reached by then, we will create a reform plan based mainly on the agreed direction and continue to strive for social consensus leading to legislation thereafter."

Parametric reform refers to adjusting figures such as the insurance premium rate and income replacement rate of the National Pension while maintaining the basic framework of the pension system. In other words, it is a reform concerning how much is paid and how much is received later. The most fundamental basis for this is financial projection. In the work report, the Ministry of Health and Welfare reported that to promote National Pension reform, it will advance the originally planned financial projection schedule from March to the end of this month, announce the preliminary financial projection results, and collect opinions through various methods.

Regarding this, President Yoon Suk-yeol emphasized a "scientific approach" to National Pension and Health Insurance reform. Minister Cho said, "(President Yoon) emphasized that pension reform is something to be done with the people, ordering the government to thoroughly investigate scientific data and materials and actively communicate with the National Assembly’s Pension Special Committee," adding, "He said that political compromise and voting should be done last, and that sufficient deliberation and scientific research must precede, as this is the image of a democratic nation based on intellectualism."

Furthermore, Minister Cho said about the structural reform of the overall old-age income security system, "It is a task that requires sufficient discussion and debate, and it is expected to take considerable time," adding, "There are cases in foreign countries where structural reform took more than a decade to succeed. We will do our best to achieve it promptly through social consensus."

Meanwhile, regarding the Ministry of Health and Welfare’s plan to utilize artificial intelligence (AI) in identifying households in crisis, Minister Cho said, "AI counseling is related to rapid support. We plan to make initial counseling calls to those who have crisis information," and "if the AI utilization system makes calls to conduct initial counseling to confirm the current crisis situation and necessary welfare needs, local government welfare officials will select additional candidates requiring further counseling and provide focused counseling to enable swift and substantial support." The AI utilization system is expected to be established by October this year, enter pilot operation by the end of the year, and be fully applied next year.

In the work report, the Ministry of Health and Welfare also reported measures to realize 'welfare for the vulnerable' by identifying households in crisis that are in blind spots, expanding support for vulnerable groups, and responding to new welfare demands. Minister Cho said, "(President Yoon Suk-yeol) urged that taxes must be used effectively with only the people in mind," adding, "Even when spending welfare finances, the welfare delivery system must be reorganized to be field-centered to provide practical help to the people, and overlapping welfare systems must be streamlined."

Minister Cho said, "The Ministry of Health and Welfare will faithfully implement the announced contents," and "We will continue to aim for welfare for the vulnerable and at the same time do our best to promote reform tasks."