[EDITORIALS]Time to talk pensions

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[EDITORIALS]Time to talk pensions

The general concept of public pension fund reform has been laid out. The idea is to first supply 80,000 won ($85) in a basic retirement pension monthly to 45 percent of seniors in the lower income class. The health minister, Rhyu Si-min, hopes to raise premium payments 12 to 13 percent while lowering retirement pension payments to 40 percent of a worker’s earlier income.
Mr. Rhyu wants to achieve two objectives. One is to bring the Grand National Party to the negotiating table by agreeing to a basic retirement pension payment. The other goal is to appease the public’s anger stemming from the earlier target of raising retirement premiums 15.9 percent by 2030.
Pension reform has been at a standstill for three years while the pension fund’s debts continue to mount. The problem is aggravated by the government’s reluctance to move because of political opposition.
The Health Ministry wanted to prevent its finances from drying up, and introduced a bill in 2003 to increase premiums sharply while lowering the pension payments to retirees from 60 percent to 50 percent of their previous annual income.
The Grand National Party at that time insisted on adopting a monthly basic retirement pension payment of 300,000 won at most to every elderly person in the country.
Mr. Rhyu’s new idea is welcome. He is trying to push for progress on an issue that has been untouched for years. But no matter how urgent pension reform is, it will be impossible without a meeting of the minds of the governing and opposition parties.
National pension fund reform is the premise for other reforms, in government employees’ pensions and military pensions, which are sucking up taxpayer money, and in private school teachers’ pensions as well.
The Grand National Party should also retreat on its demand to give a 300,000-won basic pension monthly to all seniors. It is a charitable idea, but how would they find the financial resources to meet their goal? The idea appears to be more political propaganda, especially since the party is also insisting on tax cuts.
This year is the last chance for the public pension fund. Next year is a presidential election year, and legislative elections follow in 2008. The country will be busy, and politicized, and there will be no chance of tackling pension reform then.
Korea’s birth rate is falling fast, and society is aging. It is time for both the governing and opposition parties to sit down and start thinking about public pension reform.
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