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The government held a meeting of the National Pension Review Committee at the President Hotel in Jung-gu, Seoul on the afternoon of the 10th and started the 5th National Pension Financial Calculation.
This fiscal calculation focuses on preparing the National Pension Reform Plan.
Fiscal calculation is done every five years to check the long-term financial situation of the National Pension Service and to establish plans to improve the pension system, such as adjusting insurance premium rates and pension payment rates.
Previously, the government conducted the first fiscal calculation in 2003, the second in 2008, the third in 2013, and the fourth in 2018.
In the most recent 4th fiscal calculation, the year of exhaustion of the fund was predicted to be 2057, three years earlier than the originally estimated 2060.
The National Assembly Budget Office also predicted that the fiscal balance of the National Pension would turn into a deficit in 2039 and that the reserve would run out in 2055.
President Yoon Seok-yeol emphasized the need for pension reform by including ‘pension reform for mutual benefit’ as one of the 110 major tasks of the new government, and mentioning pension reform as one of the three major reform tasks of the new government in his address to the National Assembly.
The ruling and opposition parties also agreed to form a special committee on pension reform last month, realizing that the financial deterioration of the national pension is inevitable due to population decline and aging.
First Vice Minister of Health and Welfare Jo Gyu-hong said at the meeting that “Social interest in pension reform is growing more than ever, and pension reform is a task of the times that cannot be postponed any longer. We plan to focus on preparing viable alternatives through the operation of a committee,” he said.
Accordingly, the Fiscal Accounting Committee set the goal of devising a system reform plan, and established the Financial Estimation Committee and the Fund Management and Development Committee under it. The two expert committees are in charge of estimating finances and preparing measures to improve the fund management system, respectively.
Each committee is appointed by the Minister of Health and Welfare with the recommendation of a member group or an expert group. The Financial Calculation Committee is composed of around 15 members and two expert committees are composed of around 11 members each. appointed as a member of the committee.
The Financial Calculation Committee will be formed first, and will begin to estimate the finances by the end of this month, and the expert committee will be formed sequentially.
The goal is to complete the calculation of the fiscal balance by March next year and submit the comprehensive national pension operation plan to the National Assembly in October next year based on the calculation.
The Ministry of Health and Welfare said, “The detailed operation plan of the Financial Calculation Committee will be pursued in connection with the discussion of the National Assembly Pension Reform Special Committee.”
Vice Minister Cho mentioned the ‘step-by-step increase in the basic pension’ proposed as one of the national tasks on the same day and said, “I expect that the compatibility between the national pension and the basic pension will also be discussed at this fiscal calculation committee.”
As President Yoon made a promise to raise the basic pension from 300,000 won to 400,000 won, it is interpreted to mean that discussions on reform linking the national pension and the basic pension are necessary.
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