[Choe Gang Sisa] The Unveiled Pension Reform Plan: Contents and Areas for Improvement (October 30, 2023)

(Please compare the KBS article posted earlier — in which National Pension Service (NPS) President Kim Seong-ju stated his position on the automatic adjustment mechanism —

with the approximately twelve-minute KBS YouTube broadcast now being posted, which explains the concept of the automatic adjustment mechanism. In this video, the explanation of the automatic adjustment mechanism begins at the nine-minute mark.

If one has properly understood the broadcast's explanation of an automatic adjustment mechanism suited to Korean circumstances, it should become apparent that NPS President Kim Seong-ju's interview statement yesterday — namely, that "the introduction of an automatic adjustment mechanism requires caution given the high rate of elderly poverty" — reflects a misunderstanding of what the automatic adjustment mechanism actually entails.

The Pension Future Forum will issue its position on President Kim Seong-ju's press conference remarks as soon as possible.)

(The following concerns NPS President Kim Seong-ju's position on raising the retirement age and on the automatic adjustment mechanism.)

With particular regard to fiscal stabilization measures, he stated that "if the retirement age is extended, the period for paying pension contributions will naturally increase as well,"

adding that "if raising the retirement age leads to an increase in the mandatory enrollment age and a subsequent adjustment of the statutory age threshold for the elderly, this could constitute the most substantial parametric reform measure available."

Regarding the introduction of an automatic adjustment mechanism — under which the contribution rate would vary according to demographic and economic conditions —

he indicated that, given the current level of old-age poverty in Korea, which ranks among the highest of OECD member states, a cautious approach is warranted.

https://m.youtube.com/watch?v=4r5-AsBbvD4