[News Today] GOV’T PENSION REFORM PLAN

[LEAD]
The Presidential Office is set to unveil a national pension reform plan by early next month. This proposal emphasizes generational equity and sustainability. Details like the target insurance rate will be finalized in the National Assembly.

[REPORT]
The presidential office will announce a reform plan on the national pension system late this month at the earliest. The reform will focus on generational equity and the pension's sustainability.

A presidential official said that the reform plan can delay the depletion of the national pension fund by over 30 years, which is predicted to run out by 2055 as of now.

The official added that delaying the fund depletion by seven to eight years would be meaningless and it is important to ensure the sustainability of the funds and to instill confidence in the younger generation that they too would be eligible for pension benefits down the line.

Currently, the premium rate for the national pension program is set at nine percent regardless of age. But the government's reform plan will apply varying rates for different age groups.

For example, if the premium rate rises 13 to 15 percent, the older group will see an annual one-percentage point increase in their premiums while payment by younger people will see a half a percentage point hike per year. This would effectively adjust the timing of reaching the target premium rate.

In order to ensure the sustainability of the pension fund, the government will likely introduce an internal fund stabilization system.
Under the system, premiums will increase and benefits will drop automatically when the pension fund nears depletion.

The government plans to finalize more details, such as a target premium rate, through discussions with the National Assembly. The pension reform plan will likely be announced at the president's policy briefing, which is expected to come late this month or early next month.