Public Pension Age to Reach 65

The retirement age for public servants, set at between 54 (public security rank 8 and 9) and 62 (teachers) based on position or rank, is anticipated to be extended in the long term to 65 which is the age covered by the national pension.

Currently, the age covered by the pension system is from 60, but one year will be added every five years beginning in 2013 until it reaches 65 in 2033.

In exchange of the extended retirement age, the pension replacement rate will be lowered to the level of the percentage of pension paid of the national pension (planned between 25% and 50%). The rate will pay 50% of the last salary of the retirement month of a public servant as pension. The change is intended to complement the chronic deficit of the pension fund of public servants.

The Ministry of Government Administration and Home Affairs announced on December 5 that it will draft a recommendation bill on the improvement of the pension system for public servants by the end of this month and present it to the National Assembly in June next year after going through public hearings.

But controversy is expected. The Federation of Government Employees (FGE) is raising opposition, saying it cannot accede to the improvement bill devised by the committee for the Improved Pension System for Government Employees, a subsidiary body of Ministry of Government Administration and Home Affairs, consisting of pro-government academic or civil organizations.

“We need to make the adjustments of the pension insurance dues and the amount of received pensions simultaneously in order to reform the pension system for public servants,” says Park Chan-wu, the policy director of ethics and welfare of the Ministry of Government Administration and Home Affairs. “We are revising the measure to extend the age of receiving and the retirement age to respond to the aging society like the developed nations.”

Accordingly, it is expected that movement will be made toward extending the retirement age and lowering the amount of private school and military pensions that pay based on the Public Officials Pension Act.

beetlez@donga.com