KOREA: National Assembly’s Unstoppable Management on Senior Citizen Pension Act

SOEUL, July 2, 2007: After the National Assembly has denunciated itself by rejecting the revision bill of the National Pension Act during the Assembly’s plenary session and passing the underlying Old Age Pension Act, it has decided to forgo with its new plan of increasing the payout and the number of recipients of the Old Age Pension Act. At present, no one can construe the purpose of the National Assembly’s abrupt decision. Its decision can only be interpreted as an avaricious act negligent of political mode and apathetic to political parties as the presidential election is drawing near. The underlying Old Age Pension Act, which states to provide pension for four million subscribers above the age of 60 with low income, currently offers 89,000 won a month, equivalent to $96. However, prior to the implementation of the act slated for 2008, the National Assembly has devised a revision bill to expand the elders eligible to receive pension from 60 percent to 70 percent and has passed the standing committee last week. Also, the National Assembly has agreed to increase the current proportion of the average monthly income of all subscribers of the national pension, from 5 percent to 10 percent. The National Assembly persists that if the revision bill of the national pension act becomes effective, the payment that the subscribers will receive will be reduced from 60 percent to 40 percent of the average monthly income, demanding the need to supplement the reduction via Old Age Pension Act. However, in order to push the revised bill, the National Assembly should have passed the Old Age Pension Act with the revised National Pension Act three months ago. The National Assembly’s inexplicable insistence to pass the revised bill is currently igniting fury as it has once again ruled over taxpayer’s asset. Although the public has predicted such due to the presidential election slated for December, 2007, we must reiterate whether the National Assembly has the right to deliberate the bill for its own convenience. Moreover, it is nonsense that the revised bill has passed the standing committee when ministries and offices have failed to reach an agreement on raising funds. The legislation of the Old Age Pension Act has fuelled the market as it has lacked transparent fund raising measurements. However, compared to that of the current revision bill, the situation has exacerbated as about 500 billion won will be spent by 2009 and 38 trillion won will be injected by 2028. South Korea’s financial status has been relatively benign. However, if the National Assembly continues to wield its power to alter the pension act, the financial resources will soon hit the bottom. Rather than distorting the revised pension act, the National Assembly should consider passing the buck to the next government or the next session of the National Assembly. The Ministry of Planning and Budget (MPB) should say “no” to unpredictable act conducted by the National Assembly and stop being goaded by the current political landscape. [Translated by Bo-yung Kim / KHS] ⓒ Maeil Business Newspaper & mk.co.kr