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Ruling and opposition prioritize spending amid tax revenue shortfalls

Ruling and opposition prioritize spending amid tax revenue shortfalls

Posted April. 23, 2024 07:46,   

Updated April. 23, 2024 07:46


It has been revealed that six out of 10 citizen representatives who participated in the public discourse on national pension reform favor the ‘pay more and receive more’ approach. If implemented, this plan would postpone the depletion of the pension fund from 2055 to 2062, albeit resulting in a cumulative deficit of 704 trillion won by 2093.

On Monday, the Public Debate Committee of the National Assembly Pension Reform Special Committee disclosed the outcomes of three public opinion surveys on pension reform, involving 492 citizen representatives.

The Public Debate Committee proposed maintaining the income replacement rate at 40% while increasing the insurance premium rate from 9% of current monthly income to 12%, or alternatively, raising the income replacement rate to 50% and the insurance premium rate to 13%. In the final survey (3rd round), 56% of citizen representatives opted for the income guarantee plan, whereas only 42.6% favored the ‘pay more and receive the same’ financial stability plan.

The Pension Special Committee endeavors to formulate a definitive pension reform scheme based on the survey outcomes and pass it during the plenary session before the term of the 21st National Assembly concludes on May 29. While the opposition party has declared its intent to expedite the legislative process, the ruling party has expressed discontent with the Democratic Party's legislative agenda. With a mere 37 days remaining until the conclusion of the 21st National Assembly, the ruling and opposition factions must amend the National Pension Act by devising a reform strategy informed by the findings of the Public Opinion Committee and the Pension Reform Special Committee of the National Assembly. However, reconciling their differences is expected to be a challenging task. Experts forecast that delaying pension reform will result in tens of trillions of won in losses annually.

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