By Yoon Ja-young
Staff Reporter
The Korea Development Institute (KDI) is being pressured by the government to drop out of the Korea Teachers Pension Fund. However, the KDI is being unresponsive to the government's demand.
Having played a pivotal role in framing the country's economic policy since its establishment by the government in 1971, the institute had all its staff switch to the Korea Teachers Pension Fund from the National Pension Fund in May.
The National Pension Fund, which is obligatory for all workers aged between 18 and 60 years except for government employees, private school teachers and staff, and military personnel, is expected to be depleted in 2047 if it sticks to the current premiums and benefits structure.
Also running graduate schools on economic policy and management, the economic think tank joined the teachers' pension system after receiving approval from the Ministry of Education & Human Resources Development. A number of other research institutes including the Academy of Korean Studies and the Korea Advanced Institute of Science and Technology also joined the private school teachers' pension after receiving special approval, though they are not private schools.
It was an obvious choice under the current pension system, as the Korea Teachers' Pension Fund is around 70 percent more profitable for beneficiaries than the National Pension Find. If the current generous system continues, however, it could reach depletion in 2026. Some point out that the KDI expects the government to cover the deficit anyway, just as it does with the Government Employees Pension and Military Pension funds.
``The Ministry of Education and Human Resources notified that it would narrow down the coverage of the teachers' pension to researchers and staff belonging to the graduate school within the KDI,'' said an official at the institute. He feared that the government could cut funding if the KDI refuses the proposal.
The institute seems furious over the government pressure. ``Not only the National Pension Fund policymakers but also the minister who's in charge of renovating the pension subscribes to the Government Employees Pension Fund instead of the national one,'' said KDI President Hyun Jung-taik, in a statement released to the press.
``If they don't reform the National Pension Fund, where 80 billion won in debt is accrued each day, or if they don't renovate the Government Employees Pension Fund where one trillion won in tax is injected to offset the deficit, the regulation on a couple of institutes' pension subscriptions is a digression from the core,'' Hyun said, calling for a more fundamental measures to strengthen the National Pension Fund.