Gov't pension reform plans meet resistance

An official with Federation of Government employees demanding that the goverment employees pension reform plan be dropped.

Workers cry foul over possible benefits reduction, while others say fat must be trimmed

With the government discussing ways to reform its pension plan for civil servants - a system that has suffered from chronic deficit - some suggestions for change have met with strong resistance from civil servants.

The controversial pension system, which was first introduced in 1960, has a deficit expected to reach about 270 billion won (US$280 million) this year, the largest figure since the pension first recorded a deficit of 6.5 billion won in 1993. Unless this trend is corrected, the deficit is projected to increase to about 2.1 trillion won in 2010, 9 trillion won in 2020, and 24 trillion won in 2040.

In response, the Ministry of Government Administration and Home Affairs (MOGAHA) appointed a pension development committee consisting of scholars, government employees, and officials from related ministries to complete the reform before the year-end, working with four plans presented by the Korea Development Institute (KDI). The MOGAHA plans to submit the final reform plan to the National Assembly before the first half of next year.

The development committee is reportedly discussing a gradual lowering of benefits. Under the current pension system, public employees who work for 33 years receive payments equaling up to 76 percent of their average wages during the last three years of work.

Another plan is to increase the age of eligibility to 61 in 2013 and finally to 65 in 2033, while pushing the standard retirement age to 65. Currently, those 60 and over are eligible for the pension.

Civil servants have raised strong resistance to the reform plans. A low-ranking government employee went as far as to say that the officials preparing the reform plan should count themselves lucky if they do not receive threats.

The ministry's Internet site has been bombarded by postings going over the pros and cons of the proposed pension reforms, and civil employees' organizations are urging the government to stop discussions on the reform.

A joint committee consisting of members of the Korean Government Employees' Union, the Korea Federation of Government Employees and the Korea Federation of Teachers' Associations is preparing to stage a mass rally at Gwanghwamun, downtown Seoul, on December 9.

Other civic organizations, however, have criticized the public workers, calling their moves "selfish" and mentioning that a reform plan to reduce benefits of the national pension - the system for the general public- has already been presented to the National Assembly. Under the reform plan for the national pension, the level of benefits of this pension will be lowered to 25-50 percent of their former income from the current 30-60 percent, already lower than the pension benefits of government workers.

An official at the Citizens' Coalition for Economic Justice (CCEJ) said, "To maintain the pension plan for public employees that has recorded a huge amount of deficit, while at the same time reducing benefits for general pension plan recipients, is not in keeping with an appropriate attitude for government workers, who should instead be spearheading the reform."

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