[Reporter’s Notebook] Pension Reform Requires a Complete Overhaul of the Discussion Framework

A Hollow Report from the Pension Reform Advisory Committee
The Core of Pension Reform Is Preparing for the Future
A Social Grand Compromise Body Is Needed

Looking back, it was an impossible expectation, yet hope was held onto. This thought came to mind while reviewing the progress report of the National Assembly Pension Reform Special Committee's private advisory committee, which lacked substance. The advisory committee held discussions for nearly four months to draft a pension reform proposal at the National Assembly level, but failed to present a reform plan not only by the original deadline at the end of January but also this time.

The National Assembly Pension Special Committee was established to delay the depletion of the National Pension Fund, projected to occur 32 years from now. However, the most critical issue?'what and how to reform'?was delegated to the private advisory committee composed of experts. The core issue of pension reform, which affects the retirement security of the majority of the people, was entrusted to mercenaries. As a result, a debate between progressive and conservative scholars over the 'contribution rate (the percentage of monthly income paid into the National Pension)' and 'income replacement rate (the ratio of pension benefits to lifetime average monthly income)' ensued, preventing the formation of a consensus.

The National Assembly, having outsourced the task, quietly withdrew. Even as the private advisory committee became a scapegoat amid fierce debates following the premature conclusion that 'people pay more but receive less' in the National Pension, the Pension Special Committee remained passive.

It is not only the National Assembly. The government has stayed out of discussions, stating it will present a comprehensive operational plan after the pension projection is released this October. Even President Yoon Suk-yeol, who has emphasized pension reform since the early days of his administration, said, "I will initiate efforts so that the final version of pension reform comes out by the end of this government or the beginning of the next." The confession of the People Power Party's Pension Special Committee secretary, "I don't want to do (pension reform), but it has to be a presidential pledge," seems rather honest.

The private advisory committee's report showed that pension reform is impossible under the current discussion framework. Discussions so far have focused on parametric reforms such as 'how much more to pay (contribution rate)' and 'how much more to receive (income replacement rate)' in the National Pension. Facing a super-aged society, we cannot solve old-age poverty with the National Pension alone. Therefore, parametric reforms inevitably face public resistance. Pension reform cannot succeed unless the National Pension provides confidence as a comprehensive retirement security system linked with basic pensions and retirement pensions. This is why structural reform that changes the entire framework of the pension system is necessary. For this, a social grand compromise body involving not only experts but also civil society, the National Assembly, the government, and the president is needed.