'Pay More, Get More Pension' Proposal in OECD Report... Could It Be a Breakthrough for Korea's Stalled Pension Reform?

Rep. Kim Sung-joo of the People Power Party: "We will promote a briefing session at the Special Committee level on the OECD report"

[Asia Economy Reporter Naju-seok] The Organization for Economic Cooperation and Development (OECD) has proposed a reform plan for the National Pension Service based on the principle of ‘pay more, receive more’ in its pension report, drawing attention to whether it will influence the direction of pension reform in the National Assembly. The opposition party plans to hold a briefing session on the OECD report soon and urge discussions at the National Assembly level.

Kim Sung-joo, Member of the Democratic Party of Korea./Photo by Yoon Dong-joo doso7@

Kim Seong-ju, a member of the Democratic Party and the opposition party’s secretary for the National Assembly’s Special Committee on Pension Reform, said in a phone interview on the 21st, "Since the OECD report has been released, we will push to hold a briefing session within the pension reform special committee." Kim added, "The OECD report is not biased toward either the ruling or opposition party," and "It will help understand the current reality and future improvement directions." It is known that Kim’s team has started analyzing and translating the report, which was written in English.

Earlier, in the ‘Review Report on Korea’s Pension System,’ the OECD stated, "Considering low birth rates and aging population, pension reform is necessary," and proposed, "The National Pension insurance contribution rate should be raised to a reasonable level as much as possible, and the mandatory enrollment age should be raised to allow continued payment of contributions after age 60." Furthermore, it recommended, "The upper limit of the standard monthly income should be increased to contribute to benefit increases, reductions based on income activities should be eased, and unemployment and childbirth credits should be expanded." This means pursuing measures to collect more National Pension contributions for a longer period and enabling more people to receive more benefits. The OECD also called for standardizing criteria among public pension systems and establishing systems and incentives to convert severance pay into retirement pensions outside of public pensions, such as retirement and private pensions.

In broad terms, the OECD’s ‘pay more, receive more’ proposal aligns more closely with the opposition party’s stance. The Yoon Seok-yeol administration has so far set the direction of pension reform toward ‘pay more, receive less’ structural reform to stabilize the National Pension’s finances. Because of this, the possibility that the opposition party may take the lead in discussions within the pension reform special committee cannot be ruled out. Kim said, "We are reviewing the full text, but based on what has come from the Ministry of Health and Welfare, it appears to objectively present the reality and improvement directions of Korea’s pension system."

The National Assembly’s Pension Reform Special Committee was launched in July but has yet to hold even a single meeting, remaining in a ‘closed for business’ state. Kim expressed the view that the release of the OECD report should serve as a trigger to start pension reform discussions at the National Assembly level. Joo Ho-young, floor leader of the People Power Party and chair of the special committee, previously expressed his willingness to discuss by saying, "I intend to work on the pension special committee even if it means saving time as much as possible."

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