Kim Dong-yeon, the governor of Gyeonggi Province, said on the 21st regarding the pension reform plan agreed upon by both ruling and opposition parties that it is "shifting greater burdens and responsibilities onto future generations." The day before, the parties voted on a revision of the National Pension Act centered on an insurance premium rate of 13% and an income replacement rate of 43%, noting that structural enhancements for ensuring retirement income are necessary.
On that day, Governor Kim said on CBS Radio, referring to it as a "temporary pension reform plan." He noted, "There is an intergenerational problem in shifting financial burdens and responsibilities onto the youth," and said that "additional pension reform will be inevitable." He also stated that the management system of the fund, which amounts to 1,200 trillion won, should be changed, saying, "Currently, it only invests in stocks and bonds, but the proportion of alternative investments should be increased to raise revenue."
He particularly evaluated the negotiations between the ruling and opposition parties as having only reached a parametric reform, scoring it as a "60-point plan." The Democratic Party had previously insisted that, considering the urgency of pension reform, the parametric reform should prioritize adjusting the insurance premium rate and income replacement rate. In contrast, the People Power Party insisted on simultaneously pursuing structural reforms for financial stability, leading to conflicts. However, the previous day, the leadership of both parties agreed to discuss structural reforms in the National Assembly's Special Committee on Pension Reform and only processed the parametric reform plan.
Governor Kim expressed disappointment, stating, "It's quite regrettable that this was an opportunity for both parties to reach an agreement, and I hope it could have involved a bit more structural discussion." It has been 18 years since the political sector agreed on pension reform, adjusting it in a so-called "pay more and receive more" manner. The current insurance premium rate of 9% is raised by 4 percentage points, while the income replacement rate is increased by 3 percentage points, from the current 40%.
Governor Kim, regarded as a potential opposition leader, is a former Minister of Economy and Finance from the Moon Jae-in administration. Amidst a variety of tax cut competitions in the political arena, he attracted attention as the first among potential leaders to mention "tax increases."
He met with Representative Lee Jae-myung at a location in Yeouido on the 28th of last month and stated, "Tax increases are necessary in certain areas," adding, "Welfare without tax increases is impossible. To secure new growth engines and create an ultra-aged society and an era of 'care state responsibility,' an active financial role is essential." This remark targeted Representative Lee, who made a flurry of tax cut promises, including the abolition of the financial investment income tax and postponement of virtual asset taxation, but did not reveal specific fiscal measures.