The South Korean ruling and opposition parties promised to expand the eligibility and amount of basic pension on Sunday. “We are pursuing a measure to gradually increase basic pension to 400,000 won per month,” said the People Power Party. At the same time, the Democratic Party of Korea also said they would raise the amount to 400,000 won per month and expand it to all senior citizens. The parties are competitively trying to appeal to the public without analyzing the financial burden and potential effect of what they are proposing.
The Democratic Party of Korea intends to include the revised bill of the Basic Pension Act to raise the basic pension to 100,000 won per month as one of the seven major bills for the public’s livelihoods and have it processed at an upcoming regular session of the National Assembly. The party also proposed a bill to expand pension eligibility to all senior citizens. “Raising basic pension payment was one of President Yoon Suk-yeol’s pledges, as well as one of the 100 major national tasks,” said the People Power Party in response, claiming that the president was the original proposer of the policy.
Even if the basic pension system is maintained, the number of eligible people and payment amounts will increase due to the aging trend. Raising to 400,000 won per month requires a budget of 52 trillion won in 2030, which is 2.5 times higher than this year’s budget. If the eligibility is expanded to all senior citizens as the opposition party proposed, it will be even higher.
The opposition party hastily proposed the revised bill without budgetary forecasting. In contrast, the ruling party agreed with the same plan, which puts a huge financial burden, even though the party emphasized healthy finances. Both parties are being irresponsible. If the plan to raise the basic pension amount is confirmed, the direction of the public pension reform will be lost. In addition, if the eligibility for basic pension is expanded to all senior citizens, people will lose the motivation to pay pension premiums, which will weaken the foundation of the public pension system. The parties should begin discussing pension reform for the future rather than competitively engaging in pork barrel.