Controversy over Basic Pension Plan: They Take Placing Burden on Youth…
In the 2012 presidential election, the pledge on the basic old age pension plan made by Geun-hye Park, then presidential candidate for Saenuri Party, was a matter of concern of the nation because moving forward from granting 100,000 won differentially to the bottom 70 percent of senior citizens in terms of incomes, Park promised to grant 200,000 won of pension to all senior citizens equally.
The opposition party insisting on the Geun-hye Park's administration’s fulfillment of campaign pledge on the basic pension plan and the ruling party persisting in inevitable modification of the pledge are intensively engaging in a counterattack. In the working-level meeting on April 28, the consultative body of the ruling and opposition parties and government failed to work out a compromise over legislation. Since then, there have been pouring reports telling that the scheduled payment of the basic pension this coming July will be unavoidable. However, there are not many comments on the profits and burden of the youth generation resulting from the pension plan.
In a TV debate at that time, Park was confident of the fulfillment of her pledge, saying, “I didn’t make an unrealizable pledge.” But the pledge has deteriorated as the government and ruling party set forth in chorus the inevitability of modification on the pledge immediately after Park was elected President. A ruling party official pinned down the subject in a commentary, saying, “In case of granting the basic old age pension to all senior citizens, the burden on the future generation will be increasing day by day. Therefore, the modification to the campaign pledge is inevitable.”The basic pension plan by the government is designed to operate in a way - the longer one holds the National Pension policy, the smaller the basic pension to receive. The basic pension is calculated based on all National Pension subscribes’ average wage for 3 years prior to starting to receive the pension. In this way, 100,000 won of pension will increase to 200,000 won in 2028. According to the revised plan, however, the amount of the basic pension which has been calculated on the basis of wages is to be calculated on the basis of prices; therefore, beginning 2024, the time of 10 years since enrolling, the amount of basic pension will decrease.
Is it true that the future generation should bear more burden due to the basic pension plan, as he said?
Providing graded payments of the basic pension according to the subscription period to the National Pension plan might bring about the result that the basic pension amount of the younger generation, who hold the National Pension policy long, is going to dwindle. Even if the younger generation holds the National Pension plan for a long period, the amount of their basic pension will be 100,000 won. In other words, young people who are confronting a job crunch and minimal livelihoods, such as economy, marriage and childcare, will be even unable to rely on the basic pension, the fundamental social safety net, in their later days.A report published by National Assembly Budget Office makes an analysis that if the revised plan is passed, people in their 40s will lose 15,410,000 won of money through the whole life; 27,820,000 won for people in their 30s and 42,600,000 won for people in their 20s. Upon this analysis, the government takes the position that the planned reduction of the basic pension amount won’t be unreasonable because the later generation’s enrollment rate of the National Pension plan will be getting considerably higher.
Linking to ‘subscription period’ vs. ‘income level’ of the National Pension planBack in February, the government and the ruling party, and the New Politics Alliance for Democracy (NPAD) failed to draw an agreement during their first discussion on the basic pension plan. Thereafter, they attempted to negotiate 6 times more, but the negotiations broke down. They were divided into two positions – linking to ‘the subscription period’ or linking to ‘the income level’ of the National Pension plan, but they refuse to budge an inch from their positions.
The ruling Saenuri Party proposed a plan where the subscription periods to the both pension plans are linked together in operation and ‘Durinuri Project’ to reduce the blind spots of the national pension plan is expanded. But, the NPAD makes a point that it could agree with the ruling party if the government and the ruling party withdraw the linking between the basic pension and the subscription periods.Rep. Jae-jung Yoo from the Saenuri Party said, “If the basic pension is linked to the receiving amount of the National Pension, it might encounter a lot of problems including diminishing number of recipients, compared to linking to the subscription period of the National Pension.” On the contrary, NPAD lawmaker Lee Mok-hee stood against Yoo, saying, “If to link the basic pension to the subscription period of the National Pension is the conviction of president, the government and the ruling party, the unacceptableness of such a wrong system shows the NPAD’s conscience.”
The situation seems serious, though, the Saenuri Party doesn’t look much burdensome about the negotiation on the basic pension plan. It keep insisting that the July payment schedule comes against a snag because the opposition party dragged down the plan so the plan failed to pass the National Assembly. Such insistence seems to tell that they neglected even the minimum responsibility for breaking the presidential election pledge.In the meeting on April 9 to discuss the party’s floor strategy, Saenuri Party floor leader Kyung-hwan Choi said, “We ask the opposition party to stop its unreasonable stubbornness upsetting the basic pension plan which has yet a long way forward.” With emphasis, he added, “We hope that the opposition party can shrug away its stubbornness in order not to make their intention to drag down the government and the ruling party causes a tremendous undutifulness to the elderly.”
Aside from the matter of the political power between the ruling and the opposition parties, the absence of the minimal conscience and the shortsighted administration seem exposed. In Korea, a country ranking first among OECD member countries in terms of the poverty rate and the suicide rate of senior citizens, the future generation’s old age planning for livelihoods has still a long way to go.