[EDITORIALS]Time to clean up pensions

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[EDITORIALS]Time to clean up pensions

The government plans to combine the pension systems of civil servants, private school teachers and military personnel into the national pension system. The purpose is to make it possible for people who have subscribed for over 20 years, combining any of the three special pensions and the national pension, to receive pension payments. At present, the compulsory subscription for special pensions is 20 years and the national pension is 10 years. Anyone who does not satisfy either of the two periods is not entitled to a pension but a lump sum payment.
Every year, 40,000 to 50,000 people move to the national pension system without completing the compulsory 20 years required by the special pensions. And the reverse case happens to some 28,000 people annually, but as there is no connection between the two systems, they were not entitled to pension benefits. This must be corrected. In the past, privatization of public institutes and personnel exchanges between the private and public sectors was delayed because of the wall between the pension systems.
But the government must contemplate over the way to stabilize pension finances. If those who were to receive their pension in a lump sum payment were to instead receive accumulated pension, the amount would grow to two to three times larger. Even now, pensions for civil servants and military personnel are in deficit and the private school teachers’ pensions will be drained in 2029; the national pension will be dried up in 2047.
National pensioners can get only 60 percent of what they earned on average in their lifetime, if they paid premiums over 40 years. But special pension recipients get 76 percent of their last three years’ average income if they paid premiums for 33 years. As a result , the recipients of special pensions receive 2 to 3 million won ($1,725 to $2,590) a month in general; the national pension subscribers get less than half of that. It is necessary to correct the gap to an understandable level, considering that 680 billion won in tax money was poured into the special pension system.
If the government neglects the problems related to pension finances, a pension disaster will be unavoidable in the near future. We need responsible government steps.
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