Retirement age to be at 60 from 2016

By Kim Jae-won

Ruling and opposition lawmakers have tentatively agreed to set the retirement age for public and private sector employees at 60 from 2016. In most Korean companies it is currently between 55 and 58.

Eight legislators on a subcommittee of the Environment and Labor Committee in the National Assembly agreed to support a bipartisan bill to revise the relevant labor laws, according to the Saenuri Party and the main opposition Democratic United Party.

“We’ve agreed to make bipartisan efforts. The amendments to the laws will also help reduce the drastic retirement of baby boomers,” said Lee Young-jik, an aide of Rep. Kim Sung-tae of the ruling Saenuri Party.

The tentative agreement calls for public and private companies with 300 or more employees to mandatorily set retirement age at 60 from 2016 with other smaller firms following suit from 2017.

The proposal has ignited debate about employment between generations because business organizations maintain that the change, if implemented could reduce job opportunities for young people.

In March, the unemployment rate for jobseekers between 15 and 29 was 8.6 percent, compared to an overall jobless rate of 3.5 percent, according to government statistics.

However, lawmakers insist that changing the retirement age won’t adversely affect young people because the economically active segment of the population and the number of college graduates are expected to decline from 2017.

Unionists welcomed the move, but expressed concern about the possibility of it being used as an excuse to cut wages.

“Not only the retirement age, but also the level of salaries should be guaranteed,” said Kang Hun-jung, a spokesman for the Federation of Korean Trade Unions.

Meanwhile business groups are concerned that they may incur additional financial burdens if they have to retain old employees before they retire.

“The move to extend the retirement age would increase difficulties for small and medium companies in managing manpower because they would be burdened with extra labor costs,” said the Korea Federation of Small and Medium Business in a statement.