Park presses pension reform by year’s end

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Park presses pension reform by year’s end

President Park Geun-hye urged government officials to “do their best to finalize reform of the pension system for civil servants by the year’s end,” officially setting a deadline for resolving the politically-fraught issue.

“The later the reform is executed, the bigger the burden will become and the more difficult it will be to maintain the current system,” said the president during a cabinet meeting.

This is the first time she pinned down a schedule to turn around the deficit-ridden pension system. The seriousness of the system’s losses was predicted at least 20 years back, Park noted, and the government was aware it was not sustainable. But implementing a solution has been repeatedly postponed due to resistance from government employees who don’t want to lose benefits or contribute more.

If the reform is pushed back again, the deficit facing the nation will snowball to as much as 484 trillion won ($461 billion), which she said represented 9.45 million won of debt for every individual Korean. The 484 trillion won figure she cited is the amount of money the government had to pay out for civil servants who had retired before to cover the deficit in the pension system itself in 2013.

Just hours after the president’s remarks, the ruling Saenuri Party proposed a bill to revise the pension system after acquiring signatures from all 158 of its lawmakers. Even Rep. Yoo Seung-woo, an independent, offered his signature.

“Since the reform [of the pension for government workers] is one of the most challenging problems and policy issues to tackle under the Park Geun-hye administration, I decided to push the bill through a motion based on consensus,” said Saenuri leader Kim Moo-sung.

Despite being unanimous in supporting the bill, some Saenuri lawmakers expressed concern over the political side effects of the reform. Rep. Park Myung-jae, former minister of public administration, said the reform measure has made civil servants sound like they are “thieves eating into tax money.”

“We should not hurt the pride of government officials,” he said.

Rep. Rhee In-je said that if the reforms fail, it would be terrible for Korea. “A national consensus should back up its success,” he noted.

Rep. Lee Hahn-koo blamed former President Kim Dae-jung for the deficits in the pension system. “The Kim Dae-jung government promised to shoulder any shortage in pensions for the civil servants,” he said.

During the meeting, President Park also vowed to eradicate chronic corruption in the defense industry.


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