Controversy over Discrimination between State and Official Pension

▽ Reformation process of official pension = Government employee pension system and soldiers’ pension system states the officials retiring from a company where the government or self governing body had invested ‘all or more than 1/2` would receive only half the amount of the pension.

However, from 2001, the system changed where the officials retiring from a company where the government or self-governing body had invested at least 1% would receive only half the amount of the pension, as one of the tasks to normalize shaky official pension expense.

Accordingly, the officials who were hired in the corresponding companies accumulated discontent to send a petition.

The constitutional court said while giving the decision, ˝It deviates from the principle of property rights guaranteeing to reject pension payment with the reason that the person is re-employed to a government institute˝ and added an explanation, ˝It is out of line with the pension payment stoppage system to reduce pension payment to 50% just with the reason that the person is re-employed to a government invested company without consideration of the degree of investment and the level of salary.˝

There are about 2,800 subjects to this limited pension payment. This decision makes it inevitable an additional payment of 19.2 billion won of official pension, and 7.5 billion won of soldier pension.

▽The balance with state pension = The decision by the constitutional court would broaden the difference between state and official & soldier pension.

The official pension (931,000 people) pays 76% of `average monthly income of last 3 months before retirement` when the subscriber becomes 60. However, the state pension pays 60% (when being the member for more than 40 years) of `average monthly income of total service term`.

According to the state pension reorganization plan, the pension payment percentage will go down from 55%(2004∼2007) to 50%(from 2008). Still the insurance bill will increase 1.38% every 5 years from 2010.

Soldier and official pension source of revenue drained in 1973 and 2000 respectively, and the government is making up for the insufficient amount with tax.

The government covered 59.8 billion won in 2001. As for soldier pension, the government covered 567 billion won last year, and the amount comes close to 1 trillion 600 billion won in the recent 3 years.

Jong-Hoon Lee taylor55@donga.com