Labor and Civic Groups Demand Yoon Seok-yeol Government Withdraw Pension Reform Plan

Korean Federation of Trade Unions "Worse than Private Pensions"
Federation of Korean Trade Unions "A Plan to Divide Generations"
Pension Action "Serious Damage to Security"

Labor and civic groups criticized the government's National Pension reform plan as a 'deterioration plan' that, under the pretext of financial stability, degrades public pensions to a level inferior to private pensions.

[Image source=Yonhap News]

The Federation of Korean Trade Unions (FKTU) issued a statement on the 4th, saying, "The current Yoon Seok-yeol administration's pension reform plan is a proposal that degrades public pensions to a level worse than private pensions under the pretext of financial stability." They pointed out, "The automatic adjustment mechanism is a clear automatic benefit reduction device that continuously cuts pension amounts by reducing the reflection of inflation rates. The 20s and 30s generations, who will inevitably have a lower income replacement rate than previous generations, are expected to receive pension amounts that do not even meet minimum living expenses, no matter how long or much they contribute."

The Korean Confederation of Trade Unions (KCTU) stated, "We oppose this deterioration plan that ignores the fundamental purpose of the National Pension, which is to secure retirement income, and shakes the foundation of the system by breaking intergenerational solidarity." They added, "The current proposal suggests raising the contribution rate from 9% to 13% and maintaining the income replacement rate at 42% applied this year, but it is unclear on what basis the 42% income replacement rate was presented." They continued, "The system of raising contribution rates differently by age group divides subscribers by generation and is a method of sowing division between generations." They sharply criticized, "How can the Ministry of Health and Welfare, which oversees the National Pension, promote intergenerational conflict?"

The National Action for Strengthening Public Pensions, which includes over 300 civic groups, said, "they ignored parliamentary discussions and civic deliberations calling for better National Pensions and proposed a deterioration plan that undermines the National Pension and strengthens private pensions." They added, "They intend to damage the National Pension by proposing an automatic stabilization mechanism that seriously undermines guarantee levels and an age-differentiated contribution rate increase that disregards equity between classes and fails to achieve intergenerational equity."

On the same day, the government announced a National Pension reform plan that includes raising the contribution rate for the first time in 27 years and introducing an 'automatic adjustment mechanism' that reduces pension benefits if finances worsen.