Gov’t urgent on pension reforms by end of year

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Gov’t urgent on pension reforms by end of year

The Blue House yesterday made an unusually strong push to reform the money-losing pension system for civil servants before the end of this year.

Top leaders of the ruling Saenuri Party, the government and presidential office had a meeting on Sunday about the issue. While the Park Geun-hye administration asked the ruling party to pass a reform bill before the end of this year, the party reportedly showed reluctance and asked for more time, citing the protests of civil servants and the difficulty of persuading the opposition parties.

“The president’s chief of staff [Kim Ki-choon] attended the meeting and made a strong demand that the ruling party must pass the reform bill before the end of this year,” a senior official at the Blue House said yesterday. “He told them that trillions of won in tax money was spent to make up pension-system losses while the country is aging rapidly, so we can not delay this anymore.”

The Blue House official, then, pressured the ruling party, asking its leadership if it was truly willing to push the reform. “There is no election next year and the public supports the overhaul of the civil servants’ pension,” he said. “If we do not take advantage of this situation, the people will doubt the ruling party’s willingness.”

Reforming the deficit-stricken state-run pension system for civil servants was promised by President Park in February. The pension system has an accumulated deficit of more than 12.2 trillion won ($11.69 billion) as of last year. In 2013 alone, the government provided nearly 2 trillion won to make up for the losses.

Top Saenuri officials including Chairman Kim Moo-sung and Floor Leader Lee One-koo met with Prime Minister Chung Hong-won, Minister of Security and Public Administration Chong Jong-sup and Presidential Chief of Staff Kim on Sunday to discuss the reform.

Because of the volatility of the issue, the meeting was held in secret. The top officials discussed the issue for about three hours at the prime minister’s residence in Samcheong-dong, near the Blue House.

The Saenuri Party, however, responded that it may need more time because it is an extremely sensitive issue that no previous administrations had succeeded with. Political sources said the Saenuri Party wants to wait until April next year.

The government made attempts to reform the civil servant pension system in 1995, 2000 and 2008, but those efforts fell apart in the face of massive opposition by unionized government employees.

Top leaders of the Saenuri Party said yesterday they will work with the opposition to pass a bill to reform the money-losing pension program for civil servants before the end of this year.

“Passing the public servants’ pension reform bill at the end of this year will be the goal and we will start discussions with the opposition party right away,” said Lee, floor leader of the Saenuri Party. “We will have a serious discussion to meet the goal.”

Rep. Kim Jae-won, the Saenuri’s deputy floor leader, also stressed the urgency of the issue.

“It’s a dangerous and difficult task, like pulling out a tooth from a tiger,” Kim said. “But if you leave this tiger alone, it will soon attack a house.”

Later in the day, floor leaders of the Saenuri and the main opposition New Politics Alliance for Democracy agreed to work together to pass the pension reform bill. The two parties will each establish a task force.

“The ruling and opposition parties agreed to start the discussion at the earliest date,” said Kim. “We, however, did not decide on when to vote on the reform bill.”

The New Politics Alliance for Democracy, the biggest opposition party, showed a reserved approach to the volatile issue.

“Because it is a massive issue and involves many contradicting laws, we will meticulously look at it,” said Rep. Ahn Gyu-back, the party’s deputy floor leader.

The Ministry of Security and Public Administration submitted its revision plan on Friday to the National Assembly. According to the plan, public servants’ contributions will be increased 41 percent starting in 2016, while their payouts after retirement will be lowered by 34 percent.

The government-sponsored reform plan is far stronger than a recommendation by the Korean Pension Association. Labor unions of civil servants have criticized the move.

Until now, Chairman Kim of the ruling party has stressed that the civil servants’ pension system must be reformed even if it means losing votes for the party. But Saenuri lawmakers are not so staunch.

Unionized public servants said they will stop the government’s attempt to whittle away their pension payments by threatening a general strike and a movement to demand the president’s resignation. The Korean Government Employees’ Union said yesterday it will hold a big protest on Nov. 1.

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