Vice Minister Lee Gi-il said on the 6th, 'Raising the income replacement rate to 44%, 45%, or 50% in the pension reform goes against the reform.'
On the same day, Vice Minister Lee noted this during a press briefing held near Gwanghwamun in Seoul themed on sharing examples of overseas pension reform.
The government announced a pension reform plan last year that included a 13% insurance premium rate, a 40% income replacement rate, and the introduction of an automatic adjustment mechanism. It is currently maintaining this plan.
The ruling and opposition parties agreed on a plan to raise the current insurance premium rate from 9% to 13%. Regarding the income replacement rate, the opposition claims 44-45%, while the ruling party insists on 40-43%.
The current National Pension System is set to reduce the income replacement rate from 60% to 40% by 2028, decreasing by 0.5% annually as per the second pension reform in 2007. By this calculation, the income replacement rate this year is 41.5%.
Vice Minister Lee stated, 'In administration, one must weigh what is desired against what is possible; it is best to go with 40% (income replacement rate).' He also added, 'If we continue this way, I judged that it is not a viable reform.'
The government is of the stance that a deficit has occurred after maintaining the insurance premium rate at 9% for 27 years since it was raised in 1998. According to the Ministry of Health and Welfare, the amount of deficit is 88.5 billion won per day, totaling 32 trillion won annually.
Kim Sang-kyun, the chair of the 21st National Assembly Pension Reform Committee, who attended the briefing, remarked, 'Pension reform is not something that ends once but must continue constantly, and reforms not based on consensus can lead to significant social losses.' He added, 'Even if grand reforms are necessary, it is impossible without public agreement, so gradually solving issues through incremental reforms is also a method.'