Rival parties at odds over pension reform scheme to ‘pay more, receive more’

SEOUL, The ruling and opposition parties stood divided Tuesday over a national pension reform plan that calls for paying more in premiums and receiving greater pensions amid concerns it could put a financial burden on future generations. Earlier in the day, a special parliamentary committee on pension reform held a plenary session to discuss the proposal, which was the more favored option among citizens according to a public survey conducted by the committee's special body launched in January to gather public opinion. Under the scheme, the pension's income replacement rate would be increased to 50 percent from the current 40 percent, with insurance premiums set at 13 percent. The survey, conducted on 500 Korean adults, showed that 56 percent favored this scheme while nearly 43 percent voted for the other option of keeping the income replacement ratio at 40 percent and raising the insurance premiums from the current 9 percent to 12 percent. During the meeting, the ruling People Power Party (PPP) criticize d the proposal as an "irresponsible" measure that would place a financial burden on future generations. "According to the plan, people born today will have to pay 43 percent of their income (as insurance fees) when they turn 40," Rep. Yun Chang-hyun of the PPP said. Meanwhile, the main opposition Democratic Party said the results of the recent survey should be respected. Revamping the national pension system is one of President Yoon Suk Yeol's key agenda items amid deepening concerns the pension fund could be depleted sooner than expected due to rapid aging. The state-run National Pension Service said earlier that the fund is forecast to be exhausted by 2055 after experiencing a shortfall starting in 2041. South Korea is anticipated to have the world's largest share of people aged 65 years or older by 2044 due to rapid aging, according to data from Statistics Korea. Source: Yonhap News Agency