Pension plan remains on the table

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Pension plan remains on the table

Lawmakers again failed to narrow their differences on the government’s revised basic pension scheme yesterday so that the bill could be passed at today’s plenary meeting of the National Assembly’s extraordinary session, which ends tomorrow.

Even though the opposition Democratic Party, which opposes the scheme, plans to hold its general meeting this afternoon with the goal of reaching a consensus and entering into negotiations with the ruling Saenuri Party, it appears unlikely that the two parties will dramatically reach a compromise.

“We still have time because the extraordinary session lasts until Friday,” said one key member of the DP. “But the passage of the basic pension bill appears rather bleak.”

If the bill is not passed, the government’s plan to implement the pension plan in July as scheduled may go awry.

The latest possible deadline for the passage of the bill is the end of February, given that it takes an estimated four months for the government to establish the related pension system - from accepting applications to registering them and determining pensions for its respective recipients.

Given the urgency of the matter, Moon Hyung-pyo, the minister of health and welfare, arranged on Tuesday a meeting with members of the press who cover the ministry, asking them to write stories that would motivate lawmakers to reach a conclusion.

He also accompanied Prime Minister Chung Hong-won yesterday to meet with Oh Jae-se, the head of the National Assembly’s health and welfare committee, to request a swift passage of the bill.

The DP maintains that the government should stick to the original pledge President Park Geun-hye made during the presidential race - providing all seniors aged 65 and older with a 200,000 won ($186) monthly allowance as a basic pension regardless of income.

But under budgetary pressure, the Park administration backtracked on the promise last September and reduced the benefits.

Instead of giving all seniors 200,000 won a month, the government announced it would only provide monthly allowances of 100,000 to 200,000 won to people in the bottom 70 percent income bracket.

Seniors who are not qualified for benefits from the National Pension Service, or those who have paid into their NPS accounts for 11 years or less, will receive the full 200,000 won a month. But people who have paid into their accounts for more than 11 years will get less since the NPS will also be giving them benefits.

For each additional year of contributions to an NPS account, the basic monthly pension will be reduced by about 10,000 won. Those seniors will receive at least 100,000 won a month.

Promising an increase in the basic pension for the silver generation was one of the key pledges by both Park Geun-hye and rival Moon Jae-in of the DP in the 2012 presidential campaign, reflecting the importance of the older vote and also the relatively modest level of welfare given to them.


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