The People Power Party urged the Democratic Party on the 25th to accept the introduction of an automatic adjustment mechanism within the national pension reform proposal.
Kim Sang-hoon, the policy committee chairman, stated at a meeting of the People Power Party's parliamentary countermeasure committee held in the National Assembly that morning, "I urge you to promote reform discussions, including the introduction of an automatic adjustment mechanism, without worrying about the labor community any longer, for the sake of future generations."
Both ruling and opposition parties agree on raising the insurance premium rate to 13% regarding the national pension reform proposal, but they show differences in positions concerning income replacement rates and the introduction of the automatic adjustment mechanism. The parliamentary leaders of both sides will meet that afternoon to discuss major issues, including this.
The automatic adjustment mechanism is a system by which insurance premium rates and income replacement rates are adjusted automatically based on demographic and economic conditions. The ruling party argues that it must be implemented to secure the sustainability of pension finances.
Chairman Kim pointed out that, according to the Korea Development Institute (KDI), an analysis showed that starting this year, South Korea has entered a 'society with population burden' and 'society with negative population' due to changes in the demographic structure, leading to a decrease in the working population and a slowdown in economic growth, stating that "It is a serious problem as the number of people who can work fundamentally decreases, regardless of economic fluctuations."
He continued, "The decline in the working population directly leads to a sharp decrease in the number of national pension subscribers, which will undoubtedly burden future generations," adding, "On the other hand, while the number of national pension subscribers is rapidly decreasing, the number of recipients is increasing at a fast pace."
He expected that "the number of recipients will surpass the number of subscribers by 3.58 million," expressing concern that "Ultimately, the structure will lead to a situation where the number of people receiving pensions increases exponentially compared to those paying pensions, resulting in a growing burden on future generations and the younger generation."
He noted that criticism is growing that the Democratic Party's proposed insurance premium rate of 13% and income replacement rate of 44% are insufficient, saying, "It is not reform but a deterioration."
In response to Lee Jae-myung, leader of the Democratic Party's claim for inheritance tax reduction, he criticized, "It seems that they are scared of losing votes."
Chairman Kim mentioned that Lee proposed an inheritance tax reduction plan to ensure that there would be no sudden cases of people selling their homes due to taxes, adding, "When the People Power Party consistently advocated for lowering tax rates and expanding tax credit limits, they seemed to be ignoring it, but perhaps due to the possibility of an upcoming election, it appears they hastily changed their stance during discussions."
He continued, "The issue of punitive inheritance tax on corporate management inheritance also needs urgent revision," stating that "It should not be labeled as a tax cut for the rich, and reasonable adjustments are necessary. It is ultimately in the interest of both workers and the public to ensure that corporations can grow stably and continuously create jobs, and the Democratic Party should keep this in mind."