National Pension 'Pay More and Receive More' vs 'Pay Slightly More and Receive the Same'... Discussion on Narrowing Down to Two Options

7 Public Agenda Items Derived Through a 2-Night 3-Day Workshop

The National Assembly Pension Reform Deliberation Committee has proposed two plans combining the income replacement rate and contribution rate, narrowing the discussion on national pension reform to either 'pay more and receive more' or 'pay a little more and receive the same.'

According to the National Assembly on the 11th, the agenda deliberation group of the Pension Reform Deliberation Committee presented two options the day before: raising the contribution rate to 13% and increasing the income replacement rate to 50%, or raising the contribution rate to 12% while maintaining the income replacement rate at 40%.

[Image source=Yonhap News]

The Deliberation Committee held a workshop for three days and two nights from the 8th to the 10th, narrowing down the pension reform plans to two. The agenda deliberation group consisted of 36 members representing various stakeholders, including pension workers, employers, regional subscribers, youth, and beneficiaries. They worked on specifying what the citizen representatives would learn and discuss going forward.

The plan proposed by the Deliberation Committee to 'pay more pension contributions and receive more benefits' centers on raising the current 9% contribution rate (split equally between employee and employer for workplace subscribers) by 4 percentage points to 13%, while increasing the nominal income replacement rate from 42% (scheduled to decrease to 40% by 2028) to 50%. The plan to 'pay more pension contributions and receive the same benefits' involves raising the contribution rate by 3 percentage points to 12% while maintaining the income replacement rate. This plan focuses on a smaller increase in contribution rates while keeping the current level of benefits unchanged.

The Pension Special Committee plans to select 500 citizen representatives to conduct live discussions from the 13th to the 21st of next month and then derive a single plan. Based on this, the Pension Special Committee aims to pass the pension reform bill by May 29, when the 21st National Assembly ends.