7 out of 10 South Koreans view negatively the “pay more, receive more” national pension reform proposal discussed by the 21st National Assembly. (Image courtesy of Yonhap)
SEOUL, Jul. 16 (Korea Bizwire) – A recent survey has revealed that 7 out of 10 South Koreans view negatively the “pay more, receive more” national pension reform proposal discussed by the 21st National Assembly.
The Korea Enterprises Federation (KEF) commissioned Mono Research to conduct a nationwide survey from June 17 to 26, polling 1,034 adults aged 20 and over. The results, released on July 15, show that 73% of respondents had a negative view of the proposed reforms, while only 19.4% viewed them positively.
The 21st National Assembly had deliberated on a reform plan that would increase the current pension contribution rate from 9% to 13% while also raising the income replacement rate. This proposal appears to have met with widespread disapproval among the public.
Breaking down the negative responses, 37.3% of participants viewed the reforms “very negatively,” while 35.7% saw them as “somewhat negative.” In contrast, only 3.2% viewed the changes “very positively,” with 16.2% seeing them as “somewhat positive.”
When asked about acceptable contribution rates, 59.7% of respondents preferred maintaining the current 9% rate. Only 4.2% indicated they could tolerate the proposed 13% rate.
The KEF suggests that “if public acceptance is the priority for pension reform, a rate around 10% might be a more realistic alternative.”
The survey also found that 72.7% of respondents feel burdened by their current pension contributions relative to their income. Only 5.3% said they did not feel burdened, while 22% felt neutral.
Interestingly, 71.5% of self-employed contributors, who pay the full contribution themselves, reported feeling burdened by the current rates.
This is slightly lower than the 73.8% of workplace subscribers who share the contribution with their employers. The KEF attributes this difference to generally lower reported incomes and subsequent contributions among self-employed contributors.
Regarding the proposed increase in the income replacement rate, 52.1% of respondents viewed it negatively, while 33.9% saw it positively. This suggests that concerns about depleting the pension fund outweigh desires for increased retirement income.
The proposal to raise the mandatory pension enrollment age from 59 to 64 was also met with skepticism, with 51.6% viewing it negatively.
Lee Dong-geun, executive vice chairman of the KEF, commented, “Given the high perceived burden of current pension contributions, people seem to prefer maintaining the status quo over a ‘pay more, receive more’ reform.”
He suggested that a more palatable approach might be to maintain the current income replacement rate while increasing the contribution rate by around 1 percentage point as an initial step.
M. H. Lee (mhlee@koreabizwire.com)
