The Basic Old-Age Pension Is a Defective Knockoff of the Basic Pension (2006. 11. 6)

(The Democratic Party of Korea's Pension Reform Committee recently held a forum on the direction of the Basic Pension overhaul. The Basic Pension traces its origin to the Basic Old-Age Pension, enacted in April 2007. At the time, there was considerable political turmoil surrounding the introduction of the Basic Old-Age Pension.

Five months before the Basic Old-Age Pension was introduced, OhmyNews commissioned expert columns supporting the opposition's plan and the government's plan; we are posting them on the Pension Future Forum website as a historical record. This is Professor Kim Yong-ha of Soonchunhyang University's column supporting the position of the Grand National Party, then the opposition.)

In this respect, the Basic Pension system of 'one pension per person' can be described as a system that enhances the fairness of income transfers across generations.

The Basic Pension therefore carries a significance that goes beyond a simple pension system: it transforms the burden of supporting parents, formerly borne at the level of the individual family, into a social system in which the working generation jointly supports the older generation.

What is pointed to as a problem with the Basic Pension is the excessive burden it places on future generations. This is because the Basic Pension is operated on a pay-as-you-go (PAYG) basis, and is therefore directly affected by population aging. the share of the population aged 65 and over stands at around 9% as of 2006 but will rise to around 37% by 2050, so the burden on the working generation will increase by that much.

However, the increase in the Basic Pension's burden is not a problem of the system itself, but merely reflects the increased burden that future generations will face as they confront an aging society.

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The Basic Old-Age Pension recently put forward by the government and the Uri Party is a proposal to pay a pension of 70,000–100,000 won, funded by taxes, to 60% of people aged 65 and over.

This proposal appears at first glance to resemble the Basic Pension, but it is nothing more than a 'defective knockoff.' To begin with, the purpose behind introducing the Basic Pension lies in maximizing the effect of national integration by providing universal minimum income security to all older people.

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If a welfare state is defined as a state in which the problems of life are not left entirely to the individual, but the minimum problems necessary for a life of human dignity are solved together by all citizens, then the Basic Pension system is meant to build the framework of a welfare state by having citizens jointly confront social risks such as old age or disability.

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Because the current public pension is a set of rules created, without any procedure of social consensus, in an era when the policymaking process was government-led, a new national consensus must now be drawn out at this point in time, when ordinary citizens too have come to understand what the pension system is.

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