Fix Pension Scheme Now

A civic campaign against the national pension scheme is spreading on the Internet like a brush fire, to the anguish of both top government policymakers and pension managers. It is a rebellion against a proposed change from "pay less and take more" to "pay more and take less." 

The civic movement was triggered by an article on "eight secrets about the national pension scheme," which was recently posted on the Internet. In the article, the author pointed out what he regarded as the pension scheme's absurdities, including one that would require man and wife, each with an income, to get divorced to get full benefits after retirement. 

Now a proposal to hold a candlelit protest against pension contributions in Seoul tomorrow is rapidly gaining support among Netizens, one of whom wrote he would like to bring a torch, instead of a candle. More than 80 percent of respondents to an Internet poll support the campaign. 

Worried about citizens' growing discontent, President Roh Moo-hyun called on top policymakers on Tuesday to conduct a publicity campaign, explain the proposed changes in detail and persuade people not to take to the streets. 
If it wishes to contain the fallout of a civic protest, the Roh administration will have to handle it with great care. It should be reminded that a similar attempt to improve a pension program triggered a nationwide strike in another country and resulted in the collapse of a government elsewhere. 

The primary responsibility for the civic disturbance, which is threatening to come out of cyberspace and go into the real world, lies with the government, which promised more than it could deliver when it launched the national pension scheme back in 1998. 

At the time, it promised that a worker paying 3 percent of his current income as a contribution each month would receive 70 percent of his average income in post-retirement benefits. The contribution rate has since risen to 9 percent of the monthly pay while the pension payment rate has dropped to 60 percent of a person's average income. 

Still the pension fund is projected to sustain losses beginning in 2036 and to be exhausted by 2047 if no improvement is made. Mainly responsible for the projected depletion is the declining fertility rate. One retired senior citizen will have to depend on four workers for support in 2020 and three in 2030. 

That is the reason why the government is planning to raise the contribution rate to 15.9 percent during the period from 2010 to 2030 and lower the pension payment rate to 55 percent of the individual's average income in the 2004-07 period and to 50 percent in 2008 and thereafter.

To make these necessary changes, the outgoing 16th National Assembly should have passed a revision bill to the national pension law. But political parties killed the bill by default for fear of alienating voters ahead of the April general elections. 

The Roh administration will have to submit a new bill to the 17th National Assembly for approval when it is inaugurated early next month. The governing Uri Party will have to pass it, either with or without support from the opposition. 

That is what the Uri Party is required to do as the majority governing party. If the party should shun this responsibility, the nation will have to pay a higher price later for the delay.