Vice Minister of Employment and Labor Urges Caution on Retirement Age Extension: "It Conflicts with Youth Employment"

One Day Before the ESLC Committee Announces Its Findings
"We Will Judge After Reviewing the Details... Proposal from Public Interest Members"

Kim Minseok, Vice Minister and Acting Minister of Employment and Labor, expressed a cautious stance regarding the issue of extending the retirement age, stating, "There is a direct conflict with youth employment, so we need to consider this deeply."

On May 7 at the Government Complex Sejong, Kim met with reporters and commented on the outcome of the discussion on extending the retirement age, which the Continuous Employment Committee under the Economic, Social and Labor Council (ESLC) is scheduled to announce the following day (May 8). He said, "We will have to see the results, but it is the proposal of the public interest members (without the participation of labor representatives)," and added, "I will review the contents before making a judgment." He also questioned, "The jobs young people want are at public institutions and large corporations, so is it right to extend the retirement age in such places?"

Kim Minseok, Acting Minister of Employment and Labor, is speaking at the "Loan Support Business Agreement Ceremony for Revitalizing Retirement Pensions" held on the 2nd at the Korea Federation of Banks in Jung-gu, Seoul. Photo by Yonhap News

Regarding the domestic worker pilot project with the Philippines, which the Ministry of Employment and Labor has been promoting together with the Seoul Metropolitan Government, Kim indicated that it would be difficult to launch the full-scale project next month as initially announced. He said, "We are still reviewing it, but it does not seem easy." This project is designed to address gaps in childcare and reduce the burden of care costs by employing foreign workers, but it has sparked controversy over issues such as exemption from the minimum wage. Kim stated, "84.4% of those who used domestic workers said they were satisfied, so I consider it a success," but he also noted, "Social discussion and dialogue are necessary."

Regarding retirement pensions, he stressed the need to find ways to increase returns. Kim said, "Many people should enroll and receive higher returns on their pensions," adding, "The most important aspect is the rate of return." He mentioned the fund-type retirement pension scheme, explaining, "We are not excluding the National Pension Service (NPS) as a fund operator; we are considering various types of fund-type schemes."

Currently, 7.14 million workers are enrolled in retirement pension plans, and the total accumulated funds reached 432 trillion won last year. However, the low rate of return is considered a major limitation. According to the Ministry of Employment and Labor and the Financial Supervisory Service, the annualized return on retirement pensions in 2023 was 2.35%, which is more than 4 percentage points lower than the National Pension Service's return of 6.86% for the same period.