The “Fiscal Calculation Committee for the National Pension Fund,” an expert body under the umbrella of the Ministry of Health and Welfare (MOHW) designed to discuss national pension fund reform, has been limping along, with some members bowing out in protest over disagreements related to expanded coverage.
Given the current situation, chances are high a report, worked out by the committee, might include plans to raise premium rates, delay pensioners’ pensionable age and retain income replacement rates.
The committee convened the 20th session on Aug. 11 and discussed the draft version of a final report on national pension fund reform.
In accordance with the Act on the National Pension Fund, the committee comes up with a report on national pension fund reform every five years.
The report will be used for the basis of the government’s comprehensive management plan, to be submitted to the National Assembly.
In the past, the committee proposed detailed plans, such as first and second options.
Prof. Kim Yong-ha of Soon Chun Hyang University, chairman of the “Fiscal Calculation Committee for the National Pension Fund,” speaks on ways of stabilizing the national fund at a public hearing session of the fifth committee meeting at COEX in Samseong-dong, Seoul, on Sept. 1. (Photo: Yonhap News Agency)
The committee is divided into two groups on how to overhaul the national pension fund — one group favoring fiscal stability through premium rate increase, and the other advocating the strengthening of coverage through income replacement rate increase.
The committee, chaired by Prof. Kim Yong-ha of Soon Chun Hyang University, has 12 civic experts and director generals from MOHW and the Ministry of Economy and Finance (MOEF), a majority of which belong to the group favoring fiscal stability.
The group favoring fiscal stability demanded a vote on a version that could contain a majority proposal on retaining income replacement rate and a minority proposal on raising income replacement rate. The group advocating enhanced coverage bowed out of the meeting, protesting the move.
The committee had discussed three axes: premium rates, income replacement rates and pensionable age.
The report was known to have contained scenarios on raising the premium rate from current 9 percent to 12 percent, 15 percent and 18 percent.
The report, taking scenarios, not necessarily proposals, implies a tendency of increasing premium rates.
The pensionable age is to be delayed from current 63 to 65, and the report is expected to contain a scenario on delaying the pensionable age to between 67 and 68.
At a situation where discussion on prolonging retirement age, now standing at 60, is not yet made, further delay of the pensionable age is predicted to deepen “income cliffs” among pensioners who worry about income instability until the pensionable age.
As for basic pension, the report is most likely to mention a need for lowering recipients of top 70 percent of income levels.
NPS Document Service Made Available via KB Kookmin Bank
Notices of the National Pension Service are delivered via KB Kookmin Bank Star Banking’s mobile app.
NPS said KB Kookmin Bank launching a mobile document service via its mobile banking app starting following MMS, KakaoTalk and Naver app.
KB Kookmin Bank is the first commercial bank to receive notices from a government agency via its mobile app.
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