Cheong Wa Dae pushes for public sector pension reform
Published : Oct 22, 2014 - 20:06
Updated : Oct 22, 2014 - 20:06
Reforming the civil servants’ pension system has become a latest hot topic in Korean politics, with Cheong Wa Dae showing unusual fervor in pushing the issue.

The issue took the center stage, seemingly out of the blue last week, when the National Assembly was swamped in the rushed parliamentary audit and the talks of revising the Constitution was gaining undue attention.

On Oct. 17, the government announced plans to reform the pension system following an undisclosed meeting with the ruling Saenuri Party’s leadership. 

The presidential office, which has remained largely silent on the issue of the special Sewol act that held the National Assembly deadlocked for months, has since reiterated that the matter must be resolved within the year.

According to the proposal, the pension payments by public officials will gradually be increased by 41 percent, while the payouts will be cut by 34 percent over time. In addition, payouts that are more than twice the average of 2.19 million won ($2,080) will be frozen at the current rates for 10 years.

The plans would allow the government to save about 342 trillion won by 2080, by cutting the state funds that need to be injected into the system. Although a huge sum, the actual savings vide the the government’s plans would only be 8.5 trillion won more than that drawn up by the Korea Pension Association.

In addition, despite the scale of the savings, it is only 27 percent of what the government would have to inject into the civil servants’ pension system over the next 65 years.

While Cheong Wa Dae is pushing the agenda, ruling Saenuri Party chairman Rep. Kim Moo-sung offered a different view on when the plan should be drawn up.

“Everyone shares the view that the civil servants’ pension must be reformed, and the important thing is to implement it, rather than the timing,” Kim said Wednesday.

Mindful of the friction his view on the timing may cause with Cheong Wa Dae, Kim expressed discontent about related questions quipping, “Why (is the media) egging on a fight between me and Cheong Wa Dae?”

Civil servants, meanwhile, are threatening to take drastic actions to oppose the proposed changes. Referring to it as an “evil plan that can never be accepted,” the civil servants’ union has said that a nationwide campaign to push the Park Geun-hye administration out of office may not be ruled out.

For the presidential office, the plans are seen as a maneuver to kill two birds with one stone.

The first is to reform the civil servants’ pension system, which has long been criticized for being inefficient and is bleeding money. With the issue in limbo for some years now, the Park Geun-hye administration will get credit for bringing about a massive cut in government spending.

The second, unofficial, reason is thought to be bringing the Saenuri Party chairman in line and burying the talks of revising the Constitution.

During a recent trip to China, the Saenuri Party chairman raised the issue of revising the Constitution in direct contrast to President Park Geun-hye’s view that the matter would be “an economic black hole.”

While Kim has played essential roles in the president’s political career, the Park-Kim alliance has had a bumpy ride, with some observers suggesting that Kim is pursuing his own brand of politics with an eye on the next presidential election.

By Choi He-suk (