President Park Geun-hye on Monday insisted on proceeding with the controversial public pension reform during a New Year’s press conference, despite a fierce backlash from the nation’s public sector.
“Last year, 2.5 trillion won ($2.2 billion) in taxpayers’ money was needed to cover the shortfalls in the public pension fund. (If we don’t proceed with the reform), the current system would require 10 trillion won in government subsidies over 10 years,” Park said, calling on the parties to draw up reform plans by April.
“This would likely leave our next generation with 484 trillion won worth of debt, which means a single citizen would have to pay off 9.45 million won 10 years later.”
According to the reform proposal submitted by the Ministry of Public Administration last year, all public employees will have to pay 43 percent more in premiums and receive 34 percent less in pension payouts, starting from 2016.
The presidential office initially hoped to complete the passage of the reform bill by the end of last year.
The Public Administration Ministry predicts some 4.2 trillion won would be saved by the end of the current administration’s term, and 22.1 trillion won would be saved by 2027 upon the implementation of the reform.
The proposal triggered intense resistance from the nation’s unionized public workers, who argued that the ruling party’s plan would mainly benefit private insurance firms. According to the workers, the proposal was jointly created by the Saenuri Party and the Korean Pension Association ― a group of pension experts, many of whom are associated with private insurance companies, including Samsung Fire & Marine Insurance.
The president also said the government’s plans to halve university tuition fees would be completed within this year.
The plan to cut the cost of college tuition was one of Park’s key pledges for the 2012 presidential election. At the time, she pledged to provide students with financial aid according to their family’s income levels, by expanding state-backed scholarship programs.
“I will make sure students don’t have to give up on university education because of a lack of financial means,” she said.
The Education Ministry increased its budget for scholarship programs by 142.5 billion won this year.
The president also said the government would establish a special school that focuses on career education and job training.
