The ruling Saenuri Party is gearing up to overhaul the current pension system for government employees along the lines of ``pay more and receive less.’’ But it remains to be seen whether the governing party can succeed in reforming the civil servant pension scheme this time, given strong resistance from unionized civil servants.
A reform plan prepared by the Korea Pension Association at the request of the Saenuri Party proposes raising subscribers’ premiums by nearly 50 percent over time. Specifically, they have to pay 10 percent of their income as a monthly premium, up from the current 7 percent. Pension payments for retired officials could be cut gradually.
Benefits for newly hired public officials will also be curtailed to the level given to subscribers to the national pension scheme. If these reform proposals are carried out properly, taxpayers’ money spent on covering the shortfall of the civil servant pension fund would be halved from 2016, according to projections by the association.
The reform plan is far stronger than one earlier suggested by the Ministry of Security and Public Administration, raising expectations that the current public pension system will be straightened out although it is belated.
It’s long past time for the civil servant pension scheme to be overhauled. Due to our overly generous payouts to retired officials, the deficit has been snowballing. Last year alone, the government disbursed 2 trillion won from the national coffers, and this figure is expected to reach 3.5 trillion won in 2016 if the current system remains intact.
The average monthly pension paid to retired officials amounted to 2.19 million won last year, 2.5 times the 840,000 won paid to subscribers to the national pension system. This is unfair even if civil servants pay more into the pension scheme.
Civil servants also claim that their generous pensions are compensation for their generally low salaries, but this argument also sounds unconvincing, given that their paychecks fall short of those among large companies but are above the average in the private sector. Furthermore, they are ensured employment until they reach retirement age. They should remember that the national pension system for ordinary citizens was overhauled similarly years ago.
Of course, it would be better to empower the public pension system if our fiscal conditions permit, but the reality is quite the opposite. What’s clear is that we must not pass the buck to our descendants.
The ruling party ought to take the initiative in overhauling the current scheme, considering that government officials will be affected by the change, and needs to speed up its reform drive. President Park Geun-hye also should keep a close watch on the progress of the reform because the Saenuri Party could dawdle due to its negative impact on the upcoming elections.