Ruling and Opposition Parties Reach Principle Agreement on Establishing Pension Special Committee... Progress in Pension Reform Discussions (Update)

National Assembly Speaker Meets with Ruling and Opposition Floor Leaders
Agreement Reached on Climate and APEC Special Committees
Pension Reform Talks to Proceed Through National Consultation Council

The ruling and opposition parties agreed on the 26th to launch a special committee on pension reform. Although they decided to hold a national consultation council for further discussions, they reached a principle agreement on the formation of the pension reform special committee, which can be seen as partial progress in the reform talks.

Park Hyung-soo, the senior deputy floor leader of the People Power Party, said to reporters after a meeting between the National Assembly Speaker and the floor leaders of the ruling and opposition parties, "Under the chairmanship of the National Assembly Speaker, the floor leaders of both parties and the Speaker discussed the formation of special committees," adding, "They talked about the Climate Special Committee, Pension Special Committee, APEC Special Committee, and Ethics Special Committee, and agreed to form the APEC and Climate Special Committees."

Speaker Woo Won-sik and the floor leaders of the two major parties are meeting at the National Assembly on the 26th. From the left, Park Hyung-soo, Senior Deputy Floor Leader of the People Power Party; Kwon Seong-dong, Floor Leader of the People Power Party; Speaker Woo Won-sik; Park Chan-dae, Floor Leader of the Democratic Party of Korea; and Park Seong-jun, Senior Deputy Floor Leader of the Democratic Party of Korea. 2025.2.26 Photo by Kim Hyun-min

The deadlock between the ruling and opposition parties over the formation of the Pension Special Committee to discuss pension reform issues was partially resolved. Senior Deputy Floor Leader Park explained, "The Pension Special Committee will be decided after reviewing the results of the national consultation council, but we have agreed in principle to at least launch the Pension Special Committee." In other words, they agreed to launch the Pension Special Committee first, with detailed matters to be decided after discussions at the national consultation council.

Until now, the ruling and opposition parties had differing views on where to discuss the parametric reforms such as the National Pension insurance premium rate. The Democratic Party insisted that the discussions should take place in the National Assembly’s Health and Welfare Committee, where related discussions had been held, while the People Power Party argued that a special committee should be formed to allow participation from relevant ministries and agencies. With the opposition party agreeing in principle to launch the special committee, related discussions are expected to accelerate.

However, disagreements remain between the ruling and opposition parties regarding the National Pension income replacement rate and the introduction of an automatic adjustment mechanism that would adjust pension amounts and insurance premiums according to economic conditions to enhance pension sustainability. These issues are expected to be addressed as follow-up tasks.

The People Power Party has also expressed willingness to accept the Democratic Party’s demand for an income replacement rate of up to 44%, on the condition that an automatic adjustment mechanism is introduced. On the 25th, Kim Sang-hoon, the chairman of the People Power Party’s Policy Committee, said, "The government’s position is that if an automatic adjustment mechanism is introduced, it can be handled more flexibly," adding, "We will hold further consultations on the automatic adjustment mechanism and the 44% income replacement rate based on the consolidated proposal."

The Democratic Party is currently deliberating over the automatic adjustment mechanism. Initially, during the previous national consultation council meeting, the Democratic Party conveyed the possibility of introducing an automatic adjustment mechanism with the condition that the income replacement rate acceptance by the Democratic Party would require parliamentary approval. With the People Power Party and others indicating willingness for further negotiations, the ball has returned to the Democratic Party’s court. Regarding this, Jin Sung-jun, the Democratic Party’s Policy Committee chairman, stated on the 25th, "Labor groups and civil society, who have a direct stake in pensions, have conveyed to the party strong opposition to the introduction of the automatic adjustment mechanism," adding, "We have gathered opinions that it is necessary to discuss this carefully."

The schedule for the national consultation council has also been tentatively set. The ruling and opposition parties agreed to hold a national consultation council on the 28th at 3:30 p.m., with the participation of the National Assembly Speaker, Choi Sang-mok, Acting Prime Minister and Minister of Economy and Finance, and the floor leaders of the ruling and opposition parties.

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