The so-called "more contribution, less benefits" national pension reform proposal did not pass the threshold of the National Assembly's welfare subcommittee. The ruling and opposition parties confirmed only their differences on pension reform while remaining at an impasse.
On the 20th, the National Assembly's Health and Welfare Committee held a meeting of the second subcommittee to review the national pension law amendment. While both sides agreed on increasing the "insurance premium rate" from 9% to 13%, they showed differences of opinion regarding the "income replacement rate", ultimately leading to a deadlock.
The People Power Party maintains that it agrees only to the "13% increase in the insurance premium rate" among the reform proposals. Im Mi-ae, the ruling party's secretary of the National Assembly's welfare committee, noted, "There are many differing opinions regarding the income replacement rate," adding, "It is difficult to find common ground."
Previously, both sides continued discussions regarding the income replacement rate until the end of the 21st National Assembly. The Democratic Party emphasized 45%, while the People Power Party highlighted 43%, but they ultimately could not reach an agreement and passed the issue to the 22nd National Assembly.
The People Power Party stated that the 43% income replacement rate is also based on the premise of introducing an automatic stabilization mechanism (a system that does not directly reflect inflation in pension amounts), and in today's subcommittee, they effectively reduced the replacement rate to "40%" from previous levels. This is based on the premise that to enhance the sustainability of pensions due to low birth rates and an aging population, the ratio of benefits received should also be reduced.
Rep. Im stated, "During the Roh Moo-hyun administration, when reforming the pension system, it was agreed to gradually lower the income replacement rate to 40%, isn't that reform?" He emphasized that the insurance premium rate, income replacement rate, and automatic stabilization mechanism should be discussed in connection.
On the other hand, the opposition party insisted that the income replacement rate should not be lowered. Democratic Party Rep. Kim Nam-hee argued, "If we raise the insurance premium rate while lowering the income replacement rate, that's telling current pension contributors to take a loss."