Outdated Extension of Retirement Age to Benefit Civil Servants Only

Businesses took a tough stance on the government’s plan to extend retirement age to 60, warning of the civil servants’ possible moral hazards.

“Given that forcing private companies to extend retirement age won’t be easy, only civil servants and public companies will benefit from the new plan,” said Korea Chamber of Commerce and Industry (KCCI) in its recommendation to the government, “This can end with moral hazards since only some workers, including civil servants, might enjoy the benefits.”

Moreover, KCCI asked for repealing the proposed plan, arguing that the government interfered with the private companies’ personnel management. It said the plan also goes against the trend of pursuing lifelong career instead of lifelong employment.

“Only companies and not the government can choose to extend the retirement age,” argued Korea employment Federation in its statement. It insisted the government to take a comprehensive approach to enable elderly workers to stay in the workforce longer rather than just to work for the same company longer.

Jong sik Kong kong@donga.com