The People Power Party expressed its welcome on the 14th regarding the Democratic Party's decision to accept the pension reform issue of "adjusting the income replacement rate to 43%." It noted that the conditions presented by the Democratic Party, such as guaranteeing payment in writing and expanding military and childbirth credits, are also included in the government's pension reform proposal, and stated, "We will work with the government to ensure that a reasonable decision can be made." With both parties finding common ground on the structural reform aspects, discussions on pension reform are expected to gain momentum again.
Kim Sang-hoon, the chairman of the policy committee of the People Power Party, met with reporters at the National Assembly on the morning of the same day and said, "The People Power Party positively accepts and welcomes the Democratic Party's decision to adopt the income replacement rate of 43%."
He continued, "The proposals we had suggested as supplemental, such as guaranteeing payment in writing, expanding military and childbirth credits, and providing premium support for low-income regional subscribers, are not new issues but are included in the government's pension bill," and asserted, "We will work with the government to ensure that a reasonable decision can be made."
Previously, both parties had provisionally agreed to raise the premium rate (the ratio of the money paid) from the current 9% to 13%, but they had shown differences regarding the rate of increase in the income replacement rate and the introduction of an automatic adjustment mechanism. The ruling party argued for an adjustment of the income replacement rate to between 42% and 43%, based on the premise of introducing the automatic adjustment mechanism (a system for adjusting the periodic increase rate of pension amounts linked to changes in life expectancy and subscriber numbers). In contrast, the Democratic Party demanded an increase of 44% to 45% in the income replacement rate, insisting that the introduction of the automatic adjustment mechanism should receive approval from the National Assembly. The government and ruling party's stance was that the opposition party should accept the introduction of the automatic adjustment mechanism without conditions for the income replacement rate to be reviewed flexibly.
Afterward, the ruling party stepped back, stating that it would discuss the introduction of the automatic adjustment mechanism during future structural reform processes, and the opposition party also seemed to find common ground by agreeing to review the income replacement rate at 43%. However, as the Democratic Party brought up 44% again following the results of internal consultations, the negotiations were at a deadlock. Amid this situation, the Democratic Party decided to accept 43%.
Jin Sung-joon, the chairman of the Democratic Party's policy committee, stated at a field high-level meeting held in Gwanghwamun on the same day, "We will accept the income replacement rate of 43% proposed by the People Power Party and the government," while highlighting conditions such as guaranteeing national payment in writing and expanding childbirth and military service credits.
However, the issue of introducing the automatic adjustment mechanism is expected to remain a point of contention. Jin, the policy chairman, noted, "There were expressed objections to the introduction of the automatic adjustment mechanism from labor groups, civil society, and experts," and stated, "In the current state, even if it is approved by the National Assembly, it will be difficult to implement the automatic adjustment mechanism."
Chairman Kim said, "Originally, when discussing at the National Council for State Affairs, the Democratic Party suggested that the automatic adjustment mechanism could be addressed later by forming a pension special committee," expressing the intention to address it during the structural reform discussion process.