The ruling party has begun full-fledged discussions to extend the statutory retirement age from 60 to 65. The extension was demanded by the Federation of Korean Trade Unions and the Korean Confederation of Trade Unions (KCTU).
There are concerns among management circles and some members of the public that extending only the retirement age while leaving Korea's unique employment rigidity—where it is difficult to dismiss employees—untouched could worsen a hiring cliff and fuel intergenerational conflict. In the first quarter this year, the unemployment rate among those ages 15 to 29 was 7.4%, the highest for a first quarter since 2021 (9.9%) in five years.
In response, some say Korea should look to examples of "flexible retirement age extensions" adopted by Japan and Singapore, which are also rapidly aging. In Japan, where the statutory retirement age is 60 as in Korea, if a worker wants to continue working after retirement age, corporations must choose one of the following until age 65: extend the retirement age, rehire after retirement, or abolish the retirement age. Singapore requires corporations to rehire employees after the retirement age (63) up to 68.
◇ Two major union federations say "raise retirement to 65 at once" vs. KEF says "excessive burden on corporations"
The Democratic Party is reportedly reviewing a plan to gradually extend the retirement age over the next 10 to 12 years. For example, the retirement age would be raised to 61 in 2028, 62 in 2030, 63 in 2032, 64 in 2034, and 65 in 2036.
In contrast, the two major union federations reportedly insist that the statutory retirement age should be raised at once from 60 to 65. They say a phased increase could create income gaps for certain age groups.
In response, the Korea Enterprises Federation (KEF) pushed back, saying, "If only the statutory retirement age is extended without reforming high seniority-based pay and employment rigidity, it will impose an excessive burden on corporations." If the structure that makes it hard for corporations to dismiss employees remains in place while the retirement age is extended, they may shy away from hiring in the first place.
◇ Japan and Singapore achieve a de facto extension through "rehiring after retirement"
Like Korea, Japan and Singapore, which face aging populations, are using "rehiring after retirement" as a way to extend retirement naturally. When corporations rehire workers after retirement, they typically adjust employment conditions—such as actual working hours and performance—and hire them on fixed-term contracts. This reduces labor cost burdens for corporations.
Since 2013, Japan has required corporations to choose one of the following for workers up to age 65: ▲ extend the retirement age ▲ rehire after retirement ▲ abolish the retirement age. According to KEF, as of last year, 65% of Japanese corporations chose rehiring after retirement, while 31% opted to extend the retirement age.
Singapore's statutory retirement age is 63, but corporations are required to rehire employees up to 68. It has mandated "rehiring after retirement" while leaving the retirement age as is. The Singaporean government is reportedly pursuing a plan to extend the current retirement age to 65 and the rehire age to 70, considering the aging trend.