Proposal for Permanent Operation Principles Over 4 Years
"Pension Reform, Prioritize Social Consensus"
"Let's Turn Yeongilman Oil Field Revenues into a Sovereign Wealth Fund"
"I propose to Lee Jae-myung, leader of the Democratic Party of Korea. Let us immediately establish a Special Committee on Pension Reform that will operate for four years in the 22nd National Assembly."
On the 11th, Ahn Sang-hoon, a member of the People Power Party, said this in an interview with Asia Economy, emphasizing that it is "more important than any standing committee."
Currently, among the 18 standing committees in the National Assembly, 11 chairpersons are all from the Democratic Party. The People Power Party opposed the Democratic Party's unilateral distribution of committees and abstained from voting. The remaining 7 committees are also likely to go to the Democratic Party. The special committee has yet to be discussed. Previously, in the 21st National Assembly, special committees on population, semiconductors, climate, and pensions were established.
Since entering the National Assembly, Ahn has lost sleep at night. Although he entered politics as the first social secretary of the Yoon Seok-yeol administration, the formation of the National Assembly has taken longer than expected. Ahn graduated from Seoul National University with a degree in Social Welfare, completed graduate studies at the International Graduate School of Stockholm University in Sweden and the Graduate School of Sociology at Uppsala University. As a professor at Seoul National University, he served as a policy planning committee member at the Blue House during the Roh Moo-hyun administration, leading the design of the long-term national future strategy 'Vision 2030,' which aimed to align welfare expenditure relative to Gross Domestic Product (GDP) with the OECD average by 2030.
 Ansanghoon "Lee Jae-myung, Let's Immediately Establish the National Assembly Pension Special Committee"](https://cphoto.asiae.co.kr/listimglink/1/2024061115084412587_1718086124.jpg)
Ahn Sang-hoon, a member of the People Power Party, is giving an interview to Asia Economy at the National Assembly on the 11th. Inspired by the book of Danish sociologist Esping Andersen, Ahn decided to study abroad in Sweden. / Photo by Kim Hyun-min kimhyun81@
Ahn revealed why he had been cautious about discussing pension reform until recently. He emphasized that pension reform is a product of cooperative governance that requires social consensus. Even in Sweden, where he studied abroad, it took 20 years to achieve pension reform. This was because they had to seek national consent and wait until social consensus was formed. He explained, "Even if people know something needs fixing, they think others should fix it except themselves," adding, "Although they dislike it, if it is the right path, social consensus allows us to see good results and implement them."
However, Ahn criticized Lee Jae-myung's statement that only parametric reform should be done without structural reform as nonsense. He stressed, "Pension reform must be accompanied by structural reform." Parametric reform changes key figures of the National Pension such as contribution rates and income replacement rates, while structural reform changes the pension system itself, such as integrating the National Pension, Basic Pension, and various special occupational pensions. He warned, "If welfare policies continue as they are, South Korea could collapse within 10 to 20 years."
 Ansanghoon "Lee Jae-myung, Let's Immediately Establish the National Assembly Pension Special Committee"](https://cphoto.asiae.co.kr/listimglink/1/2024061115080712579_1718086087.jpg)
Ahn Sang-hoon, a member of the People Power Party, is giving an interview to Asia Economy at the National Assembly on the 11th. Photo by Kim Hyun-min kimhyun81@
Ahn also proposed ideas to secure insufficient welfare funding. He suggested that if the presence of oil and gas fields in the Yeongilman area of Pohang City, Gyeongbuk Province, is confirmed, the revenue could be used as a welfare fund for future generations. He said he would soon propose a bill to create a sovereign wealth fund based on the Norwegian model. The government has announced that the estimated value of oil and gas reserves in this area is about 2,200 trillion won. He said, "Norway did not recklessly spend the income earned after discovering the North Sea oil fields but invested it in a sovereign wealth fund," adding, "Let's use national windfalls for the welfare of future generations."
Ahn argued that the welfare model should shift from 'cash welfare' to 'service welfare' that contributes to job creation. As an example of the side effects of cash welfare, he mentioned Sweden's '100 million days of sick leave shock.' He explained, "In the past, the total sick leave taken by Swedes exceeded 100 million days in one year," adding, "Considering Sweden's population of just under 10 million, this means that each worker (estimated 5 million) took about one month off per year due to sick leave." This was because the Swedish government guaranteed up to 90% of income during sick leave. As the income replacement rate was gradually reduced, sick leave naturally decreased. He said, "When Sweden reduced cash welfare and increased service welfare, economic growth, gender equality, female labor participation, and birth rates all improved," and added, "We should also have such a vision for a welfare state and create policies accordingly."
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