[EDITORIALS]Undoing pension reformThe government is trying to change the rules regarding the three major public pension systems, those for civil servants, the military and education workers. The changes will damage many of the reforms made two years ago. Not only will the government's proposals increase the financial burden on taxpayers, it is unfair to members of the general national pension system. The government should reconsider.
When the National Assembly's National Defense Committee drafted a bill to return the military pension system to its form of two years ago, the Ministry of Planning and Budget and the Ministry of Government Administration and Home Affairs came up with a unified counterproposal. That slapdash, hasty reaction has resulted in a bad piece of legislation, drafted without sufficient research or consideration of public opinion.
The standard used to set pension levels was changed two years ago from a system based on the rate of increase in government salaries to one based on increases in the cost of living. The government's intention two years ago was to replenish the pension systems' depleted coffers, but there were several unintended side effects. Raises for public officials have been higher recently than the rise in the cost of living, so persons who retired earlier than two years ago are being paid much smaller pensions than new retirees.
The government now wants to base pension payment increases on the rate of pay increases minus 2 percentage points. This proposal also has problems. Consumer prices and pay raises are bound to be volatile; the government will be chasing its tail trying to tweak the system as temporary inequities pop up. To spend another 470 billion won ($373 million) of tax money is unacceptable. It would be inequitable with the national pension system, based on consumer price increases, and it would also sabotage plans to increase premiums and lower benefits in the national pension system. The reforms of two years ago were insufficient, and reversing some of them would be a scandal.