Yu Jeong-bok, the mayor of Incheon and a potential presidential candidate from the ruling party, has criticized the current pension reform plan and proposed the introduction of a “Pension Peak System.” During a press conference held in the briefing room of the city hall on the 17th, Mayor Yu stated that the ongoing discussions about pension reform in the political sphere are nothing more than temporary measures that burden future generations. He argued for a fundamental solution through the implementation of the Pension Peak System.
The Pension Peak System suggests increasing pension payouts initially to provide practical support for living expenses and gradually reducing the payouts as one ages. Mayor Yu criticized the current reform proposal, which includes a 13% insurance rate and a 43% income replacement rate, for merely extending the depletion timeline of pension resources by seven years without providing a fundamental solution.
He highlighted several issues with the current pension system: its failure to reflect economic conditions across different age groups, the lack of consideration for individual life expectancy differences, which raises fairness concerns, and the issue of pensions for the elderly being used as inheritance.
Mayor Yu emphasized that the Pension Peak System allows for more pension during economically active and burden-heavy periods of life and reduces payouts when consumption decreases, enabling tailored pension distribution. He also suggested that the system could resolve imbalances caused by differences in individual life expectancy and serve as an alternative that achieves social fairness and justice.
He further mentioned the need for gradual changes to prevent disadvantages for current beneficiaries and proposed using the savings from the Pension Peak System to enhance medical benefits for the elderly.
Yu noted that he has been contemplating pension reform since his time serving as the Minister of Public Administration and Security over a decade ago, asserting that the Pension Peak System could be an innovative solution to ensure the elderly’s livelihoods and address concerns about pension depletion. He urged the government and political circles to engage in active discussions.
Meanwhile, according to political circles, the Democratic Party of Korea has conditionally agreed to accept the government’s and ruling party’s proposal of a “13% national pension insurance rate and 43% income replacement rate,” increasing the likelihood of the reform plan’s approval in March.