[EDITORIALS]More pension problems

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[EDITORIALS]More pension problems

The national pension system should by all means be fixed within this year. The National Assembly’s special committee on reforming the national pension system has just in time organized a subcommittee. Additionally, the government and the political parties are also showing signs of enthusiasm in reforming the national pension system.
But to achieve national pension reform, an important prerequisite must be met. The government employee pension, the military pension and private school teacher pension systems should all be reformed as well.
The government employee pension system began running deficits in 1993 and the military pension system in 1973. The private school teachers’ pension fund is expected to dry up in 2026. The financial situation of these pensions is in an even worse state than the national pension, which is estimated to be depleted in 2047.
These pension funds should have been reformed long ago, yet not even a debate on the issue has begun, because the government and the political parties are afraid of the powerful interest groups of teachers, public servants and the military. Without fixing these pension systems, it would be difficult to establish a justification for the reform of the larger national fund.
In the national pension system, after someone pays in for 20 years, he receives 30 percent of the the average income he or she earned during the 20 years.
The government employee pension, however returns 50 percent of the monthly income that the subscriber earned in the last three years before retirement, which is usually the highest income of their career. National pensioners can start collecting at age 60, civil servants at 52.
Every year more than 500 billion won ($515 million) of public money is contributed to make up the military pension deficit. Similar problems may appear in the private school teachers’ pension system in about 20 years. The law does not require government subsidies to make up the deficits, but it does not forbid them either. Reforms are needed urgently.
There is no prospect for reform if the plans are drawn up by public servants. The National Assembly should step in and take over the project. The National Assembly’s special committee on improving the national pension system should expand its activities and correct the imbalance between the pension systems, while finding ways to stabilize public finances fundamentally.

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