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National Pension Dissatisfies Many

Posted February. 13, 2006 06:26,   


Mr. Kim (35), who lives in Cheonan-city, South Chungcheong province, earns more than 10 million won on average a month by selling clothes. But he still hasn’t joined the National Pension Fund. “I fear that I might not receive pension fund money later and just end up funding others. Instead, I’m paying 400,000 won a month for a personal pension from an insurer for the sake of me and my wife’s rainy days in the future.”

Mr. Kwon (43), a resident of Suwon, Gyeonggi Province didn’t make enough money peddling fruits on a truck to buy into the National Pension Fund. He owed about two million won as of September 2005. Even when the National Pension Service put his truck and a bankbook under provisional attachment, he resisted paying. In the end, he had to sell his truck and had to pay premiums in 10-month installments using his credit card to have his property released from attachment.

Although it’s been two-and-a-half years since the announcement of the government pension plan, part of which says “pay more, receive less,” politicians haven’t even begun to discuss it in earnest.

But now, pension fund problems have come to a head.

According to an analysis acquired exclusively by Dong-A Ilbo from the Korea Development Institute and the Korean Institute for Social Insurance, the date when the fund is expected to dry up has moved up from 2047 to 2040-2042, yet politicians seem to be unconcerned. Due to this, future generations will have to clear up additional debts worth 70 trillion won in total, or 80 billion won a day.

If the framework of the current system remains until 2030 without a makeover, the debt will snowball to 1,883 trillion won.

Amid this turmoil, Rhyu Si-min has taken office as the Minister of Health and Welfare, and the president and the prime minister have mentioned the likely reform of the National Pension Fund. The fund is expected to be one of the biggest issues the administration will face this year.

According to undisclosed data from the National Pension Service, as the pension reform process has been delayed, the people’s distrust, anxiety, and complaints have reached a dangerous point. The National Pension Fund commissioned a public opinion research company to carry out a survey on the satisfaction created by the National Pension Fund in December 2005. According to the survey of about 1,200 pension subscribers and recipients, those unhappy with the pension numbered 46.5 percent; those who were somewhat satisfied on average numbered 37.2 percent, and the completely satisfied numbered a mere 16.3 percent.

In a survey conducted by Dong-A Ilbo, 25 pension experts were asked when the reform of the public pension system would be available in practical terms. Only eight answered, “Within this year.”