The Welfare Vice Minister also stated, “It’s a reform for the youth… Payment guarantee is also clearly stated.”
(Seoul=Yonhap News) Reporters Seong Seo-ho and Oh Jin-song report that amidst young politicians from both the ruling and opposition parties claiming that the national pension reform, the first in 18 years, would burden future generations, pension experts have rebutted that it is actually beneficial for the youth.
The government has actively explained that if the reform had not been done this time, the burden on the younger generation would have been even greater.
According to the government and political circles on the 24th, eight 30-40s lawmakers from both parties jointly opposed the national pension reform plan the previous day.
They criticized the reform plan, stating that it increases immediate insurance benefits while raising future generations’ insurance premium rates, suggesting that strengthened benefits are enjoyed by the older generation while the burden falls again on future generations.
For the same reasons, they voted against the national pension law amendment (raising premium rate from 9 to 13% and income replacement rate from 40 to 43%) at the National Assembly’s plenary session on the 20th.
However, experts assess that this reform rather reduces the burden on the younger generation.
Kim Yong-ha, a professor of economics at Soonchunhyang University, stated, “Pension reform is solely for the youth, not for the elderly.”
Professor Kim explained that it is desirable in terms of intergenerational equity to raise premium rates before older people, who have worked during periods with relatively high income replacement rates, retire, in order to make them pay higher insurance premiums before they leave the workforce.
He mentioned the pre-reform projected depletion year of the national pension fund (2056, according to government estimates), highlighting that even those currently 55, with an expected 30 more years of life, face no problem in receiving their pensions, yet they will pay more premiums due to the reform. Increasing the accumulated fund is for future generations, not the current one, he added.
Professor Jegal Hyun-sook of Hanshin University’s Department of Social Welfare stated, “There’s a tendency to focus on the ‘money paid,’ but various aspects, including the social value of pensions, should be considered.” She noted that public pensions involve intergenerational solidarity, where economically active individuals share the burden, allowing current elderly generations to receive pensions under favorable conditions due to the support from today’s working population (aged 40–50).
Professor Jegal further emphasized that if the political circle truly cares about the younger generation, solutions like covering the insurance premiums for youths not yet in the job market should be sought, rather than instigating conflict between the youth and the elderly.
The government also clarifies that the claim that the reform is more disadvantageous to youth is a misconception.
Appearing on KTV, Lee Ki-il, Vice Minister of Health and Welfare, said he believes this reform is for the youth, noting that the pension fund, under current standards, will be depleted by 2056, and without the baby boomers paying more, the young generation will naturally have to bear the cost.
The vice minister further added that the reform included a stipulation for state guarantee of pension payments, addressing the young people’s desire for increased security given concerns about fund depletion.