Welfare Ministry Denies Allegations of Pension Fraud Against Nominee Jo Gyu-hong as Untrue

Assemblywoman Shin Hyun-young Accused of Not Reporting Income from EBRD

Ministry of Health and Welfare: "Annual EBRD Income Reported to Government Employees Pension Service"
"Tax-Exempt Income under International Agreement... Not Subject to Reduction"

Cho Kyu-hong, Minister of Health and Welfare Nominee Photo by Yonhap News

[Asia Economy Reporter Chunhee Lee] The Ministry of Health and Welfare dismissed the allegations of improper receipt of civil servant pensions against Cho Kyu-hong, the nominee for Minister of Health and Welfare, raised by Shin Hyun-young, a member of the National Assembly's Health and Welfare Committee from the Democratic Party of Korea, stating that the allegations were made without verifying the system and were unfounded.

On the 16th, the nominee's confirmation hearing preparation team for the Ministry of Health and Welfare issued a press release stating, "Reports alleging that the nominee improperly received civil servant pensions are not true," and expressed regret over the publication of false information.

The previous day, Representative Shin alleged through some media outlets that after Cho resigned from public office in 2018 following his role as Director of Fiscal Management at the Ministry of Strategy and Finance, he served as a director at the European Bank for Reconstruction and Development (EBRD) and failed to report income earned there, thereby improperly receiving civil servant pensions. It was claimed that although pension recipients who have labor or business income outside of their pensions are subject to pension reductions, Cho did not report his income from the EBRD and thus received his pension without any reduction. Representative Shin criticized, "He received a salary in the hundreds of millions of won and at least 50 million won in civil servant pensions," and stated, "Nominee Cho Kyu-hong is not the right person to reform pensions but rather a subject of pension reform."

However, the Ministry of Health and Welfare fully denied these allegations, stating that the pension receipt was conducted normally in accordance with international agreements and current tax laws.

Regarding the suspicion that the nominee did not report his income from the EBRD while receiving civil servant pensions, the Ministry rebutted, "The nominee reported the income received from the EBRD annually to the Government Employees Pension Service from 2019, during his tenure at the EBRD, in accordance with the Enforcement Decree of the Government Employees Pension Act."

As for why the nominee received civil servant pensions without reduction, the Ministry explained, "Income generated from the EBRD is defined as income exempt from member countries' income tax for directors and executives based on the bank's establishment agreement," and "This establishment agreement is a valid international agreement among member countries, so the nominee's income is exempt from income tax (non-taxable)." The Ministry clarified that income subject to pension reduction includes business and labor income under the Income Tax Act, but income received from the EBRD is exempt from income tax and therefore not considered taxable income under the Income Tax Act. The Ministry added that inquiries to the Ministry of Strategy and Finance and the National Tax Service confirmed that this income is non-taxable.

Furthermore, the Ministry emphasized again that this method of calculating civil servant pensions applies equally to all pension recipients working at other international organizations such as the International Bank for Reconstruction and Development (IBRD), Inter-American Development Bank (IDB), and Asian Development Bank (ADB), and that "this is not a matter that can be changed by the nominee's personal choice."

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