Pension parity

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Pension parity

The civil servants’ pension fund needs monetary support from the state budget next year to the tune of more than one trillion won ($1.1 billion).
The soldiers’ pension fund has also suffered a loss of 929.2 billion won. Combining the two, a total of 2.217 trillion won of taxpayers’ money will be required to compensate the losses from the pension funds for civil servants and soldiers.
If we leave the civil servants’ and soldiers’ pension schemes as they are, their deficits will snowball and the people’s tax money will be used to make up the losses.
Because these pension schemes have not been reformed, even though they should have been a long time ago, the burden on the people has been increasing.
But the government has not dared to reform the pension programs for fear of protests from civil servants and soldiers, both powerful interest groups.
The two pension funds are drying up because the current schemes allow subscribers to make small contributions while receiving huge benefits.
The schemes must be changed so that subscribers pay more and benefit less after retirement.
But the government has not done this simple job and has paid for the losses in the pension funds with taxpayers’ money.
In 2000, the government added a clause to the public servants’ pension law to compensate deficits in the pension fund with money from the state budget. The government said it was trying to improve the civil servants’ pension program. Instead of raising fees and increasing the age at which subscribers start to receive benefits, the government guaranteed that civil workers will receive their pension and used taxpayers’ money as collateral.
The government drew up a reform bill for the civil servants’ pension program. Even though the reform plan is not good enough, the government can’t even finalize it in the face of resistance from civil servants. As the administration’s term nears to its end, it is unclear whether the bill will be finalized.
In the meantime, if the national pension fund has a deficit, there is no way to compensate for the loss, even though it is a compulsory pension scheme for everyone. The national pension law was changed so that subscribers will pay the same amount of fees but receive less, postponing the time when the fund will dry up.
The people are desperate for the benefits which they may or may not be able to receive in the future. But they have to take responsibility for the lives of soldiers and civil servants after their retirement. This is not fair.
The government must present a drastic reform bill for pension programs for civil servants and soldiers in order to lighten the burden on the people’s shoulders.
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