Vice Minister of Health and Welfare Lee Kiil: "This Year Is the Last Golden Time for Pension Reform"

Briefing at Chungnam Provincial Office on the 12th... "Elections Scheduled After Next Year"

Lee Kiil, the First Vice Minister of Health and Welfare, emphasized the necessity of the pension reform plan announced by the government for the first time in 21 years.

On the 12th, Vice Minister Lee held a briefing at the Chungnam Provincial Government Office, stating, "This year is the last golden time for pension reform," and added, "From next year, elections are scheduled, and the public is uncomfortable with increases in insurance premiums."

He further stressed, "If pension reform does not happen this year, all the burden will fall on future generations," and "If the number of people paying premiums decreases while the pension payment period for recipients increases, the finances will inevitably deteriorate."

The core of the reform plan announced by the government last September includes: △raising the insurance premium rate to 13% and the income replacement rate to 42%, △introducing an automatic adjustment mechanism, and △differentiated premium increases by generation.

Currently, the national pension insurance premium rate is 9%, and the income replacement rate is 40%. To receive a 40% income replacement rate, the premium rate would need to be 19.7% for the system to be financially balanced.

If the premium rate remains unchanged, the current reserve fund of 1,147 trillion won will be depleted by 2056, and from 2057, future generations will have to pay 28% of their salary as premiums, rising to 36% by 2075. Therefore, an increase in insurance premiums for pension reform is inevitable.

Vice Minister Lee emphasized, "Since social consensus has been reached on raising the premium rate from 9% to 13%, we must not miss this opportunity," and urged, "Let us come together to ensure that this can be finalized within the window of opportunity open this year."