"Request for Additional Review"... Pension Reform Report Without a Period

Civil Advisory Committee Reports to Special Committee on 29th
Most Issues Including Insurance Premium Rates Remain Unresolved

The National Assembly's Special Committee on Pension Reform's Private Advisory Committee will submit a progress report to the National Assembly on the 29th, which essentially failed to reach a consensus on major issues such as the increase of the National Pension income replacement rate. However, there was agreement on the need to reform military pensions to the level of civil servant pension reform.

The 'Status Review of Pension Reform Proposals' report, which the Private Advisory Committee is scheduled to present to the Special Committee on the 29th, includes statements such as "further review is required" on almost all current issues, from the increase of the National Pension contribution rate to the basic pension and the starting age for National Pension benefits. Although major issues were discussed, no consensus was effectively reached within the Private Advisory Committee.

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Regarding the most attention-grabbing issue, the increase in the National Pension contribution rate (the percentage of monthly income paid into the National Pension), the advisory committee summarized its position by stating, "There was a confrontation between the position advocating an increase in the income replacement rate (the ratio of pension benefits to lifetime average monthly income) and the position opposing such an increase, and the difference in views was not narrowed. Both sides share the same stance on increasing the contribution rate, but since one side supports increasing the contribution rate based on an increase in the income replacement rate and the other supports increasing the contribution rate without increasing the income replacement rate, it is difficult to say that there is agreement on the contribution rate increase."

The advisory committee stated, "Based on the results of the 5th National Pension financial projection to be finalized and announced in the future, scenario analysis of various alternatives is necessary," and "It is important to conduct comparative reviews based on empirical facts regarding the pros and cons of each alternative." This means that additional review work is needed based on the 5th National Pension financial projection scheduled to be submitted to the National Assembly in October.

There was consensus on raising the National Pension enrollment age further, but no agreement was reached. Regarding the adjustment of the benefit starting age, the advisory committee said, "Since the increase in the benefit starting age is already underway, speed control is required," and "there were opinions that measures such as extending the retirement age and improving working conditions for the elderly should be implemented simultaneously."

Differences were also confirmed regarding the issue of establishing the relationship between the basic pension and the National Pension. The Special Committee stated, "Discussions concluded at the stage where multifaceted exchanges of opinions on the nature of the basic pension and long-term development directions took place." In other words, only differences were confirmed.

Regarding occupational pensions such as civil servant pensions, military pensions, and private school pensions, the position was mostly that further discussion is needed. However, it included statements such as "Military pensions require system reform reflecting the 2015 legal amendments to the civil servant pension, and private school pensions should align with the direction of civil servant pension reform but require supplementary measures for early pension benefits due to school closures."

Concerning the activation of retirement pensions as a pillar of old-age income security, the advisory committee discussed ▲unification of systems to eliminate blind spots ▲accumulation of sufficient reserves to enable pension benefits ▲improvement of returns ▲pensionization. Regarding this, the position was summarized as "Although retirement pensions are a statutory mandatory system, in terms of old-age income security, the retirement pension system is not fulfilling its role sufficiently, and in-depth research and review of improvement measures are necessary." While retirement pensions should be supplemented to play a role in old-age income security, there was no consensus on mandatory enrollment in retirement pensions.

The Pension Special Committee had planned to report a draft of pension reform by the end of January this year, but the submission of the report was delayed due to internal disagreements within the advisory committee and the Special Committee's focus on structural reform demands.

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