The Democratic Party of Korea's "special committee on extending the mandatory retirement age" will hold a meeting on the 3rd of next month to begin full-fledged discussions on a plan to extend the statutory retirement age to 65. The intent is to speed up an attempt to legislate within the year after the end of the parliamentary audit, but differences between labor and management over the timing and method of the extension remain, suggesting turbulence ahead.
According to political circles on the 29th, the Democratic Party's special committee on extending the retirement age will hold its 4th full committee meeting at the National Assembly on the 3rd of next month to discuss the extension plan. It will be the first official meeting since the task force (TF) was elevated to a special committee, and about three months since the 3rd meeting in July.
The Democratic Party plans to gather opinions through the special committee, which includes labor, management, and young people, and then legislate an extension of the statutory retirement age within the year. It had initially presented a timeline of drafting a bill by Aug., a joint labor-management announcement in Sept., and legislation in Nov., but talks have been delayed, and even by the end of this month no concrete framework has taken shape. In response, the special committee decided to convene the full committee to review the progress of discussions and to debate the path forward.
At a closed-door subcommittee meeting held the day before (on the 28th), there was no particular progress beyond confirming the differences between labor and management. A participant in the meeting said, "This meeting merely reaffirmed existing positions," and noted, "We decided to report the progress thus far to the full committee."
The key issues are: ▲ the phased implementation timing for raising the retirement age ▲ the scope of acceptance for the "reemployment" system.
The labor community says the statutory retirement age should be raised to 65 in phases by 2033, as pledged in the Democratic Party's presidential campaign. In particular, it is demanding an "extension of the retirement age without wage cuts." Because the starting age for National Pension benefits will be raised from the current 63 to 65 in 2033, it says the "income gap" of about five years between the current retirement age of "60" and the start of pension benefits needs to be addressed.
In fact, President Lee Jae-myung and the Democratic Party pledged during the presidential race a "phased extension of the retirement age linked to the increase in the National Pension eligibility age."
Management, meanwhile, says that given the reality of seniority-based pay systems and high employment rigidity, the utilization of older workers should proceed in the form of "reemployment." Reemployment maintains employment through a new contract after retirement at the mandatory age.
Management argues that the current system mandating retirement at 60, implemented since 2017, has led to side effects such as reduced new hiring for young people and the spread of early retirement. It also says that if the retirement age is further extended to 65, corporations could face greater labor cost burdens, so a comprehensive overhaul of the pay structure—such as introducing a "job-based pay system" that sets compensation according to the difficulty and responsibility of duties—must proceed in tandem.
With differences between labor and management unresolved, the likelihood of legislation within the year appears to be diminishing. Even within the special committee, some say, "Unless the government and the ruling party present a specific bill, the goal of 'legislation in Nov.' will be virtually impossible."
Currently, the 22nd National Assembly has 10 bills related to extending the retirement age, including revisions to the Act on Prohibition of Age Discrimination in Employment and Elderly Employment Promotion. The bills by Democratic Party lawmakers Park Hong-bae, Park Jeong, Seo Young-kyo, Park Hae-chul, Han Jeong-ae, Kim Ju-young, Lee Su-jin, Lee Yong-woo, and The Progressive Party lawmaker Yoon Jong-o all extend the statutory retirement age from the current 60 to 65, implement it in phases depending on the size of business sites, and have the government provide support to business owners who extend the retirement age. By contrast, the bill by People Power Party lawmaker Kim Wi-sang allows corporations to choose between "retirement age extension" and "reemployment," and stipulates that any extension of the retirement age be linked to reform of the pay structure.
A special committee official said, "It feels like we have effectively given up on the goal of legislating in Nov.," and added, "It is difficult for labor and management to find a compromise. In the end, the National Assembly will have to settle the plan through a political decision."