Rival parties clash on reforming national pension within current parliament's term

Politics

Published: 26 May. 2024, 18:00 Updated: 26 May. 2024, 18:09

Rival parties clash on reforming national pension within current parliament's term

People Power Party floor leader Choo Kyung-ho, second from right, speaks during a meeting with the press at the National Assembly in western Seoul on Sunday. [NEWS1]

Rival parties clashed over the weekend on whether to reform the national pension scheme within the current National Assembly’s term, which ends on Wednesday.

The liberal Democratic Party (DP) argued that a parametric reform of the scheme should be done within the remaining term of the 21st National Assembly, while the conservative People Power Party (PPP) said the entire reform should be further discussed and handled by the incoming parliament.

PPP floor leader Choo Kyung-ho on Sunday said the reform should be prioritized during the first regular session of the 22nd National Assembly, rejecting the DP's proposal to handle a parametric reform first.

The regular session convenes on the first day of September every year and lasts for as long as 100 days.

“We need to reach national consensus and create a pension system that looks ahead 70 to 100 years for the sake of the youth and future generations,” Choo said at a press meeting in the National Assembly in western Seoul.

He further proposed establishing a consultative body to discuss the reform scheme with the two major parties in the upcoming 22nd National Assembly.

"The DP, which had neglected the reforms for years, is now suddenly pushing through a yet-to-be-agreed reform just three days before the 21st National Assembly's term ends," Choo said.

The PPP floor leader also rejected the proposal made by National Assembly Speaker Kim Jin-pyo and the DP to pass the income replacement rate hike within the current parliament’s term, stressing that parametric and structural reforms cannot be done separately.

The income replacement rate refers to the percentage of pension payments compared to the average lifetime income of an individual. It is one of the two major rates discussed in the reform, along with the insurance premium. The two major parties have agreed to raise the premium from the current 9 percent to 13 percent of income.

National Assembly Speaker Kim Jin-pyo speaks during a meeting with the press at the National Assembly in western Seoul on Sunday. [NEWS1]

Earlier in the day, the National Assembly speaker called for passing the income replacement rate hike before the 21st National Assembly’s term expires, following the DP's acceptance of its rival PPP's proposal to increase the rate to 44 percent, stepping back from its initial suggestion of 45 percent.

“The opinion gap on a parametric reform of the pension scheme between the rival parties has significantly narrowed after going through public discussion,” Kim said during a press conference held at the National Assembly.

A day earlier, DP leader Lee Jae-myung asked for President Yoon Suk Yeol’s prompt acceptance of the party’s proposal to pass the pension reform during a plenary session scheduled for Tuesday and asked the PPP to initiate a detailed discussion for swift legislation.

“We cannot let the pension reform be canceled just because of a one percentage point difference,” Lee said during an emergency press conference held for the pension reform as he announced taking the PPP's suggestion on the rate.

“If [the president] avoids [the proposal] referring to other reasons, we can only conclude that [the president] did not plan for pension reform in the first place,” Lee said, adding that the public remembers the president’s promise for the reform.

The presidential office on Sunday reiterated its stance on handling the bill with the incoming parliament, considering that the matter requires sufficient time and process to reflect everyone’s opinion, including the younger population who will be impacted the most by the change.

BY CHO JUNG-WOO [cho.jungwoo1@joongang.co.kr]