By Kim Bo-eun
Baby boomers are likely to be allowed to extend their retirement age in return for shorter work hours and reduced wages as early as next year.
The Ministry of Health and Welfare said Sunday that the government has drafted a bill to allow baby boomers to work beyond their retirement age as part of efforts to tackle the rapid aging of Korean society.
Baby boomers in Korea refer to those who were born from 1955 to 1963.
According to the draft, employees aged 50 or over may be able to register for shorter work hours at their workplaces and extended retirement on condition that they are paid less. Employers should comply with the request unless it negatively affects the business. Reduced hours should not exceed the 15 to 30 hour range.
“Baby boomers are going to be able to extend their working years by having shorter working hours and they can make use of their increased amount of free time to draw up plans for their retirement years,” said the official.
“We plan to develop related programs and educational content for them.”
“Young unemployed people can take jobs that arise from the cutback in working hours of baby boomers, and financial support will be provided to employers,” the official added. The number of baby boomers was estimated at 7.1 million. Fifteen percent of them are working now.
The so-called salary peak system was introduced in the banking sector in 2001. It guarantees employment until age 58, the official retirement age for the sector. Although there is a fixed retirement age in the corporate sector, it is usually difficult to remain at work until that age.
Along with guaranteeing the retirement age, the worker’s salary is gradually decreased. In the first year at age 56, the salary is reduced to 75 percent, in the second, down to 55 percent and in the third, lowered to 35 percent.
However, the plan has not been well implemented at companies due to the cut in salary. Successful implementation of the newly introduced system also remains questionable, as it has the same pitfall of being paid less.
Retirement of the baby boomer generation started this year and there are concerns that if proper measures regarding retirement are not taken, it will become a serious social problem in three to four years.