Ruling, Opposition Lawmakers Slam Gov't at Pension Committee: "Is There Will to Reform Pensions to Favor Lower Earners?"

▲ Committee Chairman Yoon Young-seok tables agenda items at the 8th plenary meeting of the Special Committee on Pension Reform held at the National Assembly on September 29.

Ruling and opposition lawmakers on the National Assembly's Special Committee on Pension Reform spoke with one voice on Tuesday (September 29) to criticize the government's basic pension reform plan, questioning whether it truly presents a plan favoring lower earners (providing more support to those with lower incomes) to alleviate senior poverty.

At the committee's plenary meeting, Democratic Party lawmaker Nam In-soon pointed out to Minister of Health and Welfare Jung Eun-kyeong, "Looking at the Korea Institute for Health and Social Affairs' analysis of the government proposal (for basic pension reform), the poverty reduction effect was estimated at around 0.3%." She added, "In light of the principle of 'more for the bottom, less for the top' to narrow the poverty rate and poverty gap, the effect on reducing poverty does not seem that significant."

Lawmaker Seo Young-seok of the same party also criticized the proposal, saying, "The government claims it will strengthen retirement income through graduated benefits favoring lower earners, but in reality, there is a risk it will be viewed as a reform plan that brings no real change on the ground." He added, "I question whether it is sound policy when there is no target for retirement income security and the system simply seems to be pieced together."

He continued, "They say they will continue to push for structural reform of the basic pension, but it does not look very novel, and it is doubtful whether there is any genuine will to reform the system."

Democratic Party lawmaker Oh Gi-hyoung, the ruling party ranking member, remarked, "This basic pension reform plan was described as providing 'more for the bottom and less for the top,' but is this really the kind of 'more for the bottom' that will help reduce the senior poverty rate?" He added, "It does not seem that the system is being designed with a consistent awareness of the problem. Aren't you merely responding on a short-term basis?"

People Power Party lawmaker Ahn Sang-hoon, the opposition ranking member, said, "We expected a reform favoring lower earners that cuts significantly at the top, but some evaluate that the government simply put forward a plan that only gives more to the bottom out of a calculation that it could not ignore senior votes amid falling presidential approval ratings." He asked pointedly, "Why did you put forward a reform plan that only gives more?"

Lawmaker Woo Jae-joon of the same party also addressed Minister Jung, saying, "You brought a reform plan that maintains the basic pension payout to the bottom 70% of senior incomes, but there are research studies projecting that the senior poverty rate will continue to decline." He asked critically, "Is it right to define all 70% as impoverished and distribute money to them?"

Criticism also followed regarding the decision to suspend the "rebalancing" (readjustment) of the National Pension Service fund.

People Power Party lawmaker Park Sumin told Minister Jung, "There is not a single institutional investor that does not conduct rebalancing. This means only South Korea's National Pension Service failed to observe the investment rules that all institutional investors adhere to." He pointed out, "For reasons unknown, the National Pension Service did not rebalance, failed to secure cash, and suffered direct losses as a result."

(Photo: Yonhap News)

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