On the 20th, the ruling and opposition parties reached a drastic agreement on the national pension parameter reform, which includes a premium rate (contribution) of 13% and a replacement rate (benefit) of 43%. If this passes in the National Assembly plenary session, it will mark the first pension reform in 18 years since 2007. Considering that the premium rate was raised to 9% in 1998, this will be the first increase in 27 years.
Kweon Seong-dong, the floor leader of the People Power Party, and Park Chan-dae, the floor leader of the Democratic Party, signed a proposal based on these details during a meeting chaired by National Assembly Speaker Woo Won-shik.
Speaker Woo noted, “The agreement on pension reform, which directly affects the lives of the people, is a very historic moment.” He added, “Despite the conflicts and tensions between the ruling and opposition parties regarding the Constitutional Court impeachment trial, the process of sharing wisdom and having heated discussions was precious, and I believe it will be recorded in the political history.”
The parameter reform will raise the pension premium rate from the current 9% to 13% (0.5% annually over 8 years starting from 2026), and the replacement rate from 40% to 43% (starting from 2026). Additionally, the period of national pension credits for military service will be extended from the current 6 months to 12 months. The birth credit will also be expanded from the current second child to the first child.
The special committee for pension reform will consist of a total of 13 members: 6 from the People Power Party, 6 from the Democratic Party, and 1 from a negotiating body. The chairperson will be from the People Power Party, and the activity period will be until December 31 of this year, with provisions for extension if necessary. The special committee will have the authority to review legislation and will process agenda items based on agreement between the ruling and opposition parties. Additionally, measures for financial stabilization and reforms for pension finances, including national, basic, retirement, and personal pensions, will be discussed.
During a press conference at the National Assembly, the floor leader Kweon said, “We could not enforce our proposal on the replacement rate due to the limitations of being a minority party. I feel sorry for the younger generation,” but also stated, “The issue of the national pension should be reevaluated every five years. We have agreed to discuss other reform proposals in the pension special committee, and we will do our best to reform in a way that eases the burden on future generations.”