Saenuri pushing pension reform
The ruling Saenuri Party is accelerating its moves to overhaul the deficit-stricken state-run pension system for government employees, echoing calls by the Blue House to pass a reform bill by the end of the year.
After his meeting with Security and Public Administration Minister Chung Jong-sup yesterday morning at the National Assembly, Saenuri Chairman Kim Moo-sung said that he would sponsor the reform bill on behalf of 158 Saenuri lawmakers in an effort to give the bill more weight.
He further stressed that fixing the civil servant pension system would do a service to the general public. It will cost 53 billion won ($50 million) over the next 10 years just to keep the plan afloat, Kim said, emphasizing that the funds to cover the losses would only come from state coffers.
The ruling party chairman added that he decided to sponsor the bill to demonstrate the Saenuri’s determination to pass the bill to overhaul the controversial pension system, which will require 2.4 trillion won in taxpayers’ money this year alone to compensate for the losses.
During the meeting yesterday, Kim was briefed by Minister Chung on the progress in working out a plan to reduce the scope of losses incurred by the program, which has come under increased public scrutiny over what many see as excessively generous benefits for retired public servants.
The 62-year-old veteran politician continued that his party would determine by today which plan to use in the envisioned reform bill, adding that it would be put to a parliamentary vote sometime next week.
According to the National Assembly Budget Office, 8.5 trillion won of taxpayers’ money will be needed in 2023 to keep the pension program for government workers afloat - a 14.8 percent increase from this year.
The budget office stated in its July report that the pension program for government workers is projected to have taken in 7.78 trillion won in pension contributions this year, though those contributions would be outrun by its spending, projected to be around 10.2 trillion won.
The office continued that the gap between earnings and spending will only widen if the pension system remains as it is, especially with the number of government employees from the baby boom generation retiring.
Among the proposals for reform discussed within the Saenuri and by government officials is one that would raise monthly pension contributions by about 41 percent and slash benefits by 34 percent at the maximum to reduce losses.
Freezing benefits rates for the next 10 years for retired government workers, who receive twice the amount afforded to those on the universal pension program for the general public, is another option being floated.
The Saenuri’s determination to produce a reform bill is in sync with the presidential office’s wish to wrap up the matter by the end of this year, though the affirmation directly contrasts with comments Kim made two days ago, when he stated the timing of the reform was of less importance than actually making sure it was carried out.
Kim’s remark on Wednesday fueled more speculation over a possible rift between him and President Park Geun-hye. The two have stood at odds over policy before, notably during the Lee Myung-bak administration, when Park was a lawmaker in the Grand National Party, the precursor to the Saenuri.
Kim said last week during a trip to China that discussions among lawmakers on a constitutional amendment would explode once the ongoing parliamentary session ends in December.
The comment was reported to have raised the ire of the president, who made her opposition to such discussion clear earlier this month.
BY KANG JIN-KYU [email@example.com]