The special committee on civil servant pension reforms narrowed its differences over the weekend, raising speculation the weekslong debate about the reforms is coming to a close.
The details on the reform plan for the debt-ridden pension system were discussed with floor leaders of rival political parties Monday afternoon.
The parties set a May 2 deadline to finalize the plan.
The committee, comprising government representatives, public servants and pension experts, has mapped out a tentative plan, which would decrease pension payments for civil servants by 10 percent and increase their financial contribution by 30 to 40 percent.
“The pension reform plan has nearly come to a close as there were agreements on many aspects,” said Rep. Kang Gi-jung from the main opposition New Politics Alliance for Democracy.
The government has pushed to restructure the loss-making pension system for government employees in an attempt to deal with snowballing national debt.
According to the revised scheme, the government’s pension payment rate will be lowered to between 1.65 and 1.75 percent from the current 1.9 percent. This will raise the insurance rate from 14 percent to between 18 and 20 percent.
Government workers currently receive 57 percent of their average income when they retire, but it is expected to drop to between 49.5 and 52.5 percent. It would mean under the revised plan, public servants will be required to pay 30 to 40 percent more from their income, but receive 8 to 13 percent less when they retire.
The government and pensioners have so far agreed to put a cap on the maximum pension public servants can receive.
The working group for the pension overhaul agree that the new plan will be based on a pay-more, receive-less proposal, but the details are yet to be finalized, sources said.
Issues such as implementing a wage peak system and realigning the pension payment between higher-earning public servants and lower-earning government officials were some of the remaining sticking points in the negotiations.
Unionized workers have resisted the changes. About 260,000 workers, including 60,000 government employees and 10,000 teachers, staged a one-day strike Friday last week to protest the government’s drive for reforms to the pension system and labor market.
About 100 members from 90 trade unions from the Confederation of Korean Government Employees’ Union vowed to go on a hunger strike for five days starting Monday.
