[EDITORIALS]Pension plan needs attention

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[EDITORIALS]Pension plan needs attention

The government and the governing Uri Party have failed to reach an agreement on how to reform the National Pension Fund system in their policy consultation meeting.
The opposition parties have different views of their own. Thus, it is unlikely that a reform bill will pass through the National Assembly during April’s extra session. It is raising concerns that plans to amend the pension system will float without direction in the days ahead.
The biggest problem with the current pension system is that recipients receive more than they pay. Consequently, the government said that the funds will be depleted by 2047. The state-run think tank, the Korea Development Institute, forecasts that the funds will be depleted five years earlier than the government forecast.
There is only one solution to this problem. We need to change the system so that people will pay more during their working years but receive less after their retirement. The government wants to reduce pension payouts ― 60 percent of one’s wage ― to 55 percent this year and further cut it down to 50 percent by 2008. In turn, the government wants to gradually raise pension fees from 9 percent of one’s wages to 15.9 percent by 2020.
The governing party’s stance is that we should hold off on pension fees paid by workers, but that the payout should be reduced. But such a plan would amount to merely postponing by five years the projected year the pension fund will be depleted.
The proposal to put off until 2008 the decision on whether to raise pension fees that workers pay conveys the image that politicians are merely passing on an explosive subject until after the 2007 presidential elections. The opposition party’s views also seem to follow such considerations.
As the world population ages, reforming the national pension system is becoming a key issue. In order to alleviate the burden on future generations, the government has to increase the burden of the current working generation for their post-retirement pension money. It is an unpopular and therefore, a difficult task.
The government and the governing party should ask themselves how committed they are to reforming the national pension. Considering the nation’s political calendar after 2006, we would be putting ourselves in a pickle if the government were to delay reforming the national pension fund.
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