Civil servants pension in Korea Lasting reform needs social dialogue, not unilateral push Hundreds of government employees made a shambles of a public hearing held Monday to discuss how to reform their deficit-stricken pension plan. The melee was a sad portrait of our society, in which a range of interested parties ― private and public, from farmers to bureaucrats ― do not hesitate to use physical force to express their will. One can understand the anger and embarrassment that public servants feel in the face of threats to drastically change their pension plan: To sum up, the government wants its employees to pay 43 percent more in premiums and receive 34 percent less in annuities. But that should be no reason for unionized government workers to wreak havoc during a public debate, especially considering that there still remains a considerable gap between the national pension and the reduced pension for civil servants. Quite a few elderly citizens even have to subsist on a maximum monthly basic pension of 200,000 won. Currently, public-sector workers who retire after 20 years of service receive about 2.17 million won ($2,080) on average a month, 2.5 times higher than the 870,000 won their private-sector counterparts receive each month. Moreover, retired public servants begin to receive pensions when they become 56 years old, compared with age 61 for those who receive the national pension. The civil service pension fund dried up in 2010 and the government has had to make up for losses using taxpayers money. The annual subsidy will increase from 2.5 trillion won to 6.2 trillion won in 2020. According to the Korea Federation of Taxpayers, each retired civil servant will likely receive 530 million won in total pension: he or she will pay only 140 million won in premiums with the other 390 million won provided by taxpayers. What all this shows is that the civil servants pension plan cannot continue like this. Unionized government workers say their pension has the nature of supplementing lower salaries and severance pay, stressing they have made sacrifices for the country and anticipate comfortable post-retirement lives. Yes, there were times when leaders lured talent into government jobs using fat pensions as bait. Recently, however, the salary gap between public and private sectors has narrowed sharply, and people long for government jobs for job security and various other benefits. The nation can ill-afford to put off the discussion about pension reform, but there are problems in the way that the government is pushing for it. Rep. Rhee Hahn-koo of the Saenuri Party, who leads an ad hoc team for pension reform, says the ruling party will push ahead with the reform despite strong resistance from the public servants union. Succeed or not, the government will sow another seed of national division by pursuing this route. Any reform, and consequent burden sharing, should be gradual and consensual if it is to last long without seriously damaging national unity. The Park Geun-hye administration needs to reexamine its reform formula along with the representatives of government employees instead of one-sidedly pushing ahead after a perfunctory public hearing. That said, civil servants also need to remember the examples of some European countries where adherence to vested interests by public sector workers led to pension defaults and national economic crisis. This is an issue that requires careful thought and a long-term perspective. koreatimes.co.kr/www/news/opinon/2014/09/202_165093.html
Posted on: Tue, 23 Sep 2014 14:00:11 +0000
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