The results from the citizen committee tasked with gauging public opinion, were released on April 23 by lawmaker Kim Sung-joo. (Image courtesy of Yonhap)
SEOUL, Apr. 25 (Korea Bizwire) – A national survey on reforming South Korea’s pension system found that a proposal to raise contributions in exchange for higher payouts was most popular among those in their 40s and 50s, while younger Koreans were more reluctant to increase their payments, highlighting a generational divide.
The results from the citizen committee tasked with gauging public opinion, released on April 23 by Kim Sung-joo, a lawmaker from the liberal Democratic Party who is spearheading pension reform efforts, showed that 66.5 percent of those in their 40s and 66.6 percent of those in their 50s favored the “pay more, receive more” overhaul plan.
But support was lower among other age groups. Just over half, or 53.2 percent, of those aged 18 to 29 backed the proposal, as did 48.6 percent of those in their 30s. And among those 60 and older, only 48.4 percent favored increasing contributions in return for larger payouts down the line.
The plan, dubbed the “income security” proposal by officials, would raise the income replacement rate — the proportion of pre-retirement income that the pension pays out — to 50 percent from the current 40 percent, while boosting contribution rates to 13 percent from 9 percent.
An alternative “fiscal stability” plan, which would keep the replacement rate at 40 percent but raise contributions to 12 percent, drew support from 44.9 percent of those aged 18 to 29 and 51.4 percent of those in their 30s. But it was less popular among those in their 40s, at 31.4 percent, and those in their 50s, at 33.4 percent.
The citizen committee, comprised of 492 South Koreans, conducted the survey after weeks of public deliberation on the two competing reform plans put forward by lawmakers. In the end, 56 percent backed the income security proposal, while 42.6 percent preferred the fiscal stability plan.
The National Pension Service (Image courtesy of Yonhap)
Regionally, the income security plan had the strongest support in Daegu and North Gyeongsang Province, at 72.3 percent, followed by the Daejeon, Sejong, Chungcheong and Gangwon areas at 64.9 percent. It was least popular in Busan, Ulsan and South Gyeongsang Province at 39.5 percent.
The results highlighted divisions not just across age groups but also subscriber types. While 70.7 percent of those enrolled in regional pension plans favored increasing contributions, the rate was lower at 59.9 percent among workplace subscribers. Among those with other types of pensions like civil service pensions, 52.9 percent backed the income security plan.
As South Korea’s parliament prepares to take up pension reform amid a worsening demographic crisis, with low birth rates and an aging population straining the system’s finances, the debate is shaping up as an intergenerational tug-of-war.
The main conservative opposition People Power Party has criticized the income security plan as a reckless overhaul that would saddle future generations with higher costs. On Facebook, lawmaker Yoo Kyung-joon called it “an apparent regression from the perspective of a sustainable pension system.”
But the governing Democratic Party has welcomed the citizen committee’s finding as reflecting the public’s desire to bolster retirement incomes, even at greater cost.
“The survey results showing concerns about fiscal stability among those over 60 receiving pensions, and the younger generation in their 20s prioritizing income security as they worry about the pension’s depletion, were unexpected,” said Kim of the Democratic Party.
“But they are meaningful as the product of a deliberative process based on sufficient information and understanding.”
M. H. Lee (mhlee@koreabizwire.com)
