An increase in national pension premium is expected for workers

The National Pension Service Financial Calculation Committee, a governmental advisory body that discusses ways to improve the national pension system, has tentatively agreed on a reform plan to raise the average monthly premium paid by employer-provided policyholders by at least 90,000 won. By increasing premiums and raising the pension age, the committee estimated that it would be possible to delay the point at which the pension fund would run out of money from 2055 to 2093.

According to reports by The Dong-A Ilbo on Monday, the Financial Calculation Committee is set to convene its 21st meeting on Friday and present a reform report to the Ministry of Health and Welfare. Comprising 13 civilian members and two government representatives, the National Pension Act mandates the committee to formulate reform proposals every five years, considering financial health and birth rate factors. The upcoming proposal marks the committee's fifth financial calculation.

For approximately eight months since November 30 of last year, the committee has been deliberating on the adjustment of the premium rate (the amount you pay) and the income replacement rate (the amount you receive), currently set at 9 percent and 40 percent, respectively. As a result of these discussions, two options have emerged: a 'fiscal stabilization plan' that proposes raising the premium rate to 12 to 18 percent while maintaining the income replacement rate and a 'retirement income guarantee plan' that suggests increasing the premium rate to 13 percent while elevating the income replacement rate to 50 percent. Both options consider a minimum premium rate increase of 3 percentage points.

Using the average monthly premium for employer-provided policyholders as of April, which stands at 292,737 won, this would translate to an additional 97,579 won per month for employees (48,779 won each for themselves and their company). Locally provided policyholders, on the other hand, would experience an average monthly increase of 42,001 won.

The Ministry of Health and Welfare will conduct a public hearing on the reform plan at the end of this month to gather opinions. Subsequently, the Ministry will compile the feedback and submit the plan to the National Assembly.


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