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to Trim Pensions Decried
August 8, 2003
government will lower the amount of pension payouts again, to 50 percent
of the average wage during the contribution period. Labor strongly opposes
the move and warned that the labor-government dispute regarding the
five-day workweek system could spread to the national pension issue.
government already lowered the payout percentage this month to 55 percent,
down from 60 percent. But in order to stabilize the pension account's
finances, the government announced that payouts would be lowered to 50
percent from 2008. The pension premium, meanwhile, now 9 percent of
income, will rise to 10.38 percent in 2010. The government will then
increase the premium every five years until it reaches 15.9 percent in
government will be discussing its reformation bill for the national
pension with related ministries until the bill is submitted to the
National Assembly on Aug. 18. The government plans to hold public hearings
as soon as the final plan is confirmed.
also claimed that the government has started "killing" the
national pension in order to expand the markets for private insurance
companies, and declared that it would start a strike against the reform
Korean Confederation of Trade Unions and the Federation of Korean Trade
Unions together warned that they would impede the National Assembly from
passing the government reform bill in September.
confederation explained that if pension payouts were lowered to 50 percent
then a person who has been paying the pension for 40 years will received a
monthly W670,000 ($570), or $140,000 less that what he should originally
umbrella union group also claimed that the government bill lowered the
value of the national pension, and demanded that the government maintain
the payout rates but lower the insurance premium rates instead.