"New Administration Should Prioritize Ability-Based Reemployment"...A Discourse on Transforming Social Structure [Retirement Age Extension, Time for Choice]

A Hot-Button Issue Ahead of the Presidential Election
Experts Warn of Declining Corporate Competitiveness
Negative Views on Uniform Retirement Age Extension
Emphasis on Establishing Criteria for Rehiring Older Workers

With the June 3 presidential election approaching, the issue of extending the retirement age has emerged as a hot topic in political circles. This is because it is not simply a matter of increasing the working age, but also requires comprehensive consideration of intergenerational issues with young people, pension benefits, wage system reforms, and corporate competitiveness. There is a growing consensus that it is time to seriously address the grand discourse of transforming the structure of our society.

Lee Jaemyung, the presidential candidate of the Democratic Party of Korea, recently stated, "The gap between the legal retirement age and the start of National Pension benefits is a cliff for people's livelihoods," and emphasized, "We must improve the reality where retirees are driven into poverty due to unprepared retirement." Kim Moonsu, the People Power Party's presidential candidate, has consistently opposed a uniform extension of the retirement age through legal amendments, even while serving as Minister of Employment and Labor, although he supports preparing measures to ensure continued employment. This is due to concerns that such an extension could further worsen youth employment. Through his campaign pledges, Kim has also emphasized securing jobs for young people, including encouraging large companies to introduce open recruitment for new graduates and supporting youth entrepreneurship.

The issue of extending the retirement age is expected to be discussed in earnest after the new administration takes office. The Democratic Party has already launched a retirement age extension task force (TF) and begun concrete discussions at the party level.

The key issue is expected to be whether the extension of the retirement age will be legislated. The labor community and the Democratic Party, which holds a majority, argue that the retirement age should be legally set at 65. In contrast, the business community and the conservative People Power Party advocate for "selective reemployment," considering the burden on companies. Their position is to maintain the current legal retirement age but allow companies the autonomy to rehire necessary personnel. As a result, regardless of which presidential candidate is elected, it is widely expected that the discussion process will inevitably be contentious.

Experts advise that the new administration should focus not simply on extending the retirement age, but on selective reemployment based on ability. This is because merely increasing the retirement age could actually undermine corporate competitiveness. Therefore, they stress that the new administration should establish criteria for rehiring older workers.

Heo Jaejun, president of the Korea Labor Institute, said in a phone interview with Asia Economy on May 15, "In order for talented individuals to continue contributing to our industries and various sectors, the retirement age should not be uniformly extended." Heo recently drew attention for offering suggestions on the retirement age issue at a closed-door meeting of the Presidential Committee on Low Fertility and Aging Society.

He emphasized that, ultimately, our society must move toward ability-based reemployment if it is to accept workers who have reached retirement age. This is because a uniform extension of the retirement age would disproportionately benefit large corporations and the public sector, where labor unions are strong, rather than small and medium-sized enterprises. It would also have a negative impact on youth employment. Heo stated, "Only about 8 to 9 percent of all workers are able to enjoy the benefits of the retirement age," and added, "Extending the retirement age would become a system that benefits only this small group."