[EDITORIALS]Pension reform or politics?

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[EDITORIALS]Pension reform or politics?

Minister of Health and Welfare Rhyu Si-min has expressed his intention to reform the current public pension system. Mr. Rhyu said in a forum, “Seeing the National Pension piling up potential debt at a rate of 80 billion won ($80 million) a day, I feel like I’m listening to the ticking of a time bomb.” He added, “If we fail to reform the system this year, it will be impossible to do so next year, as the political parties will use the issue to attract votes for the presidential election.”
This remark shows that Mr. Rhyu has carefully studied the current conditions of the public pension system in the two months since he took office. His understanding of the issue has deepened and he sees from a relatively neutral point of view the political conditions that surround the reform efforts.
Mr. Rhyu also said, “We need to abandon our aim of making political gains,” showing that he has realized the biggest enemy of reforming the public pension systems is political profiteering. Due to the upcoming series of major political events, including a presidential election next year and a National Assembly election in 2008, if the government fails to reform the pension system this year, it will be hard to do it until 2010.
In some developed countries such as Sweden, Germany and Japan, the governing and opposition parties have cooperated in reforming their pension systems. They did not count the benefits and losses of reforming their systems. On the other hand, Italy, which delayed a reform of its pension system, only faced more trouble later.
Currently, the government’s proposal for the stabilization of the pension fund’s financial conditions, under which general policyholders will have to contribute more but will be paid less, conflicts with the opposition Grand National Party’s proposal, under which the people who had been exempt from pension contributions will be added as contributors. Unless the governing and opposition parties care only about how many votes they can get, they will be able to reach some kind of compromise. It was in regard to this that Mr. Rhyu said he had a solution.
Mr. Rhyu emphasized the necessity of changing pensions for those with certain jobs, including public employees, soldiers and teachers at private schools. Since those pensions are run with the help of national taxes, reform is needed all the more.
“I am nervous,” he said. “I am desperately trying to solve the problem this year. I am prepared to be beaten to death in order to reform the national pension system.”
We’ll see about that.
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