Income Replacement Rate at 43% 'Opposed' by Labor and Civic Groups: "Guarantee 50%"

Major Labor Unions, PSPD, and Government Employees' Union Protest:
"This Means Abandoning the Public's Retirement Security"

On the 14th, as the ruling and opposition parties tentatively agreed to raise the National Pension income replacement rate to 43%, labor and civic groups strongly opposed the move.

Yonhap News reported on the 14th that the Korean Confederation of Trade Unions stated, "This agreement is a mockery of the citizens," and "We oppose the 43% income replacement rate."

On the same day, the Democratic Party said, "If the People Power Party ultimately accepts three conditions?legal guarantee of state payment, expansion of credits for childbirth and military service, and increased support for insurance premiums for low-income groups?then the Democratic Party will also accept the 43% income replacement rate," to which the People Power Party immediately responded with welcome.

The National Action for Strengthening Public Pensions, the two major labor unions, Kim Seong-ju of the Democratic Party of Korea, and Kang Eun-mi of the Justice Party held a joint press conference on the steps in front of the National Assembly main building on the 22nd, urging 'pension reform based on the results of public deliberation.' Yonhap News

If the income replacement rate proposal of 43%, in addition to the already agreed insurance premium rate (13%), passes the National Assembly, the point at which the National Pension fund turns to deficit is expected to be delayed by 7 years, and the depletion point by 9 years, compared to initial estimates.

In response to the tentative agreement on the income replacement rate between the ruling and opposition parties, the Ministry of Health and Welfare and the Ministry of Economy and Finance stated, "We respect the bipartisan agreement on the National Pension income replacement rate negotiations and will closely consult with the National Assembly regarding the opposition party's proposed conditions."

The Korean Confederation of Trade Unions urged, "At the National Assembly Pension Special Committee's public deliberation committee, the citizen delegation accepted a 13% insurance premium rate to raise the income replacement rate to 50%. We call for acceptance of the 50% income replacement rate increase in accordance with the citizens' will."

The Federation of Korean Trade Unions also expressed regret over the Democratic Party's decision, stating, "It is very regrettable as it diverges from the citizens' will." They added, "If pension reform proceeds ignoring the wisdom of the citizens, the effect of benefit increases will be limited, and the insurance premium rate will rise sharply, leaving room for controversy over appropriateness. In particular, discussions on introducing an automatic adjustment mechanism must be excluded to avoid going against the people's will."

Seodaemun-gu, Seoul, National Pension Service Seoul Northern Regional Headquarters Counseling Center. Photo by Yonhap News

Civic groups also voiced opposition. The People's Solidarity for Participatory Democracy argued, "The Democratic Party, which insisted on a 44% income replacement rate, made a misstep in a desire to push pension reform before the presidential election," and "Such pension reform must be stopped."

They emphasized, "The Democratic Party must immediately undertake responsible reform to realize the 50% income replacement rate demanded by the people, not serve as a mere supporter of the government and ruling party's pension reform."

The Korean Government Employees' Union Federation also issued a statement saying, "They made a regressive decision focused solely on political interests, ignoring the fundamental problems of the National Pension system that will be responsible for the people's future," and demanded, "Raise the National Pension income replacement rate to at least 50%."

They stated, "The ruling and opposition parties colluded over the National Pension income replacement rate. Raising the insurance premium rate to 13% and maintaining the income replacement rate at 43% is a decision that thoroughly ignores not only public expectations but also international recommendations."

They further criticized, "We want to ask why the Democratic Party, despite so much controversy, is colluding with internal forces to push through fundamental reforms of the National Pension. We suspect it is a ploy to shift the political burden of pension reform to the current administration by the time of the president's impeachment."

They demanded ▲ raising the National Pension income replacement rate to at least 50%, ▲ establishing practical measures to ensure fairness and sustainability of the National Pension system, and ▲ immediate reconsideration of the National Pension reform plan reflecting public demands and the results of the public deliberation committee.

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