| Park Neung-hoo, Health Minister |
According to the National Pension Service (NPS), the pension fund is expected to bottom out by 2056 or 2057, three to four years earlier than the NPS predicted five years ago. So the government is contemplating extending the subscription period to the age of 65 from the current 60.
After the scheme was announced Friday, people have been voicing outrage about the possible changes, which will directly affect the livelihoods of millions of people after they retire.
“I think it is unfair for the government to extend the subscription period of the pension. I don't know if I will be able to work until my retirement. I could be jobless in my 40s or 50s. How am I supposed to sustain my livelihood without any income?” said Kim Jin-hyub, a Seoul resident nearly 40 years old.
Some say if the government wants to stretch the pension subscription period, it should simultaneously extend the legal retirement age, which is currently set at 60, because many will be unable to pay premiums until 65 after retiring at 60 and they will be without any income for the five years of gap.
“If we receive the pension starting at 68 years old, the government needs to extend the retirement age to 68, too. How are we going to live without any sort of income?” said Chung who is in her 30s.
Over 900 online petitions voicing out opposition to the extension have been posted on Cheong Wa Dae's online petition website.
“The government wants us to pay premiums until we are dead,” a petitioner wrote.
“The government has bankrupted the pension fund, but why are they asking the people to take responsibility? I want my pension premium reimbursed,” another petitioner wrote.
Upon a strong public backlash, the Ministry of Health and Welfare said nothing has been finalized.
“The recent controversy about the national pension, including the premium hike and subscription extension, is only a small part of what is being discussed,” Health and Welfare Minister Park Neung-hoo said in a statement released Sunday.
The ministry is scheduled to conduct its fourth financial review of the NPS and release the draft on Aug. 17. The government conducts the review every five years.
“With the draft, we will garner more experts and public opinion. We plan to come up with a comprehensive plan of operation by late September and plan to submit a bill for approval at the National Assembly by late October,” the minister said.
The payout year was initially set at 60, but the government decided to push it back starting in 2013, creating a one year delay every five years. People who were born in 1952 will receive their pension at 60 years old, while those born in 1969 will get their pension at the age of 65.
Currently, there is 634 trillion won ($557 billion) in the national pension fund as of late May, which is equivalent to 36 percent of the country's GDP. The number is expected to reach 2,500 trillion won by early 2040, but after this peak, it is expected to fall and be completely depleted by 2056.
The country's aging population and low birthrate have sparked concerns over the state pension system's sustainability.
These are significant factors as they mean the economically active population is constantly falling, which reduces the number of new subscribers, while there are an increasing number of pension recipients due to extended life expectancy.