Health and Welfare Minister Rhyu Si Min said at a recent public debate that he wants to reform special pension programs for civil servants, soldiers, private school officials, and others. He wants to allow for the same special programs, but have less benefits for now subscribers. And since he said he would put his job on the line, it means he is going to initiate a real discussion on pension reform.
The issue of balance for special pensions has always been a point of contention, mainly that they pay more than the regular national pension and so cause a deficit. Indeed, the national pension pays about twice what participants pay, but with special pensions it can be between 3 and 4 times as much. The civil servants and military pensions are in the red and each year hundreds of millions are spent on them. The critics say they pay more than the national pension despite being in poor financial condition, and the whole country pays the bill.
It just makes sense to operate on the most needy area that has been afflicted. And of course the country will not agree to reform which leaves that problem unresolved. The government is to be complimented for expressing determination to reform the system even at the cost of upsetting the parties involved right as elections are coming up.
Pensions are, like taxes, a question of how much to take in from people and how to go about distribution. That is why there needs to be a balanced and efficient blueprint that takes the next generation into consideration. The government must not make the stupid mistake of abandoning the pension's function of guaranteeing income by neglecting what it cannot cover in order to try to avoid a financial burden in the future. The special pensions, too, must be looked at from the perspective of social cost and not just balance, because only by doing so will we find a solution. Instead of hurrying because of distorted political practices like election campaigns, the priority should be determining the order of business and direction of reform.
The Hankyoreh, 4 April 2006.
[Translations by Seoul Selection]
[Editorial] Pension Reform Must Be Done Right |
