Yoon Transition Team to Release Pension Reform Roadmap... Accelerating Preparation of Reform Plan

Refining Basic Work on National Pension Reform by Economic Subcommittee 1 of Transition Committee
Yoon-An Pact Intersection Followed by Realistic Plan Expected

[Asia Economy Reporters Oh Ju-yeon, Geum Bo-ryeong] The presidential transition committee of President-elect Yoon Seok-yeol has officially raised the issue of ‘pension reform,’ signaling that efforts to prepare reform plans will intensify. Although complex interests suggest that there will be difficulties until a solution is found, since Transition Committee Chairman Ahn Cheol-soo emphasized the necessity of pension reform most strongly during his presidential candidacy for the People’s Party, and a consensus on the need for pension reform was sufficiently formed during the last presidential election process, it is expected that discussions on the broad framework will proceed smoothly.

[Image source=Yonhap News]

According to the People Power Party on the 16th, the pension reform task will be handled by the Economic Subcommittee 1, which will refine the groundwork. The day before, the transition team appointed former Vice Minister of Strategy and Finance Choi Sang-mok as the secretary of Economic Subcommittee 1, mentioning key economic pledges such as support for small business owners in response to COVID-19, easing real estate loan regulations, pension reform, and abolition of capital gains tax on stocks as major tasks for the subcommittee. Pension reform holds an important position, being included as item number 3 under President-elect Yoon’s top 10 pledges titled ‘Restoration of fairness and common sense, normalization of the Republic of Korea.’

The transition committee’s attention to pension reform is also evident through its members. Professor Shin Sung-hwan of Hongik University’s Business Administration Department, appointed as a member of Economic Subcommittee 1, has a high level of understanding of pension reform, having served as president of the Korea Financial Research Institute and the Korean Pension Society. In a phone interview on the day, Professor Shin said regarding the pension reform roadmap, “We will first review the intersection of the People Power Party’s and People’s Party’s pledges, then eliminate those that lack feasibility and find appropriate measures.”

Previously, the People Power Party proposed establishing a presidential public pension reform committee and suggested preparing a rational pension reform plan through measures such as mandatory one-person-one-national pension, fair pension burdens across generations, and securing retirement income for pension subscribers. In particular, since the current 9% contribution rate is expected to cause an excessively high pension burden for the 2030 generation, there is speculation that the ‘contribution rate’ may be adjusted. The People’s Party, which was most proactive in pension reform, has a more specific plan. They propose reorganizing the National Pension into a single system by integrating the civil servant pension, military pension, and private school teachers’ pension into the National Pension to implement a uniform pension system. They also plan to revise the system through enacting the ‘Sustainable Integrated National Pension Act (tentative name)’ and forming the ‘National Public Pension Reform Promotion Council (tentative name),’ applying the same system to all subscribers afterward to ensure intergenerational equity.

Economic Subcommittee 1 is expected to first put all proposals from the two camps on the table and then prune them. Since the transition committee is just being formed, no detailed roadmap has yet been released beyond the decision that Economic Subcommittee 1 will handle pension reform. Unlike before the presidential election when each camp presented economic pledges, the transition committee is more cautious even about individual statements, showing a reserved attitude. On the day, former Vice Minister of Strategy and Finance and secretary of Economic Subcommittee 1 Choi Sang-mok said in a phone interview, “I haven’t started work yet, so I don’t have anything specific to say,” adding, “Since the Economic Subcommittee 1 members have not met yet, detailed tasks (such as the pension reform roadmap) will be discussed after we hold a meeting.”

However, since there has been sufficient mutual understanding regarding pension reform, there is no disagreement about the speed of reform plans. A source from Chairman Ahn’s side said, “Pension reform was agreed upon by all presidential candidates and is the first task for the next government,” emphasizing, “It cannot be delayed any longer for the country’s future.” A source from President-elect Yoon’s side also said, “The pension reform plan will require coordination among several subcommittees,” adding, “It should be handled by Economic Subcommittee 1 but discussed deeply and broadly.”

This content was produced with the assistance of AI translation services.