A survey showed that more than 9 out of 10 current public officials expect an income gap before they receive their pension after retirement.
About half of retired civil servants who have experienced or are experiencing a pension income gap responded that they lack essential living expenses of more than 2 million won per month, raising the need for an extension of the retirement age and income security measures.
According to policy research results presented by Chae Jun-ho, a professor of business administration at Chonbuk National University, at the 'Civil Service Pension Income Gap and Retirement Age Extension Debate' held at the National Assembly on the 10th, 91.9% of 2,657 current civil servants expected a pension income gap after retirement.
This survey was conducted from August 13 to September 30 targeting 2,657 current and 158 retired public officials.
Among retired civil servants, 24.1% responded that the pension income gap is currently ongoing, and 15.8% responded that they had experienced an income gap of more than one month in the past.
The economic burden due to the income gap was also found to be significant.
Among 63 retired civil servants who have experienced or are experiencing a pension income gap, 50.8% answered that their household's average monthly income is more than 2 million won short of essential living expenses.
Additionally, 60.3% of them responded that their severance allowance was exhausted faster than originally planned.
As a result of a survey of retired public officials on their experience of income-generating activities after retirement, 36.7% responded that they had no income-generating activities, and 16.5% responded that they had experience participating in public sector re-employment projects.
Current public officials most preferred extending the retirement age as a policy alternative to resolve the income gap.
The current retirement age for civil servants is 60 for general workers, but with the 2015 civil servant pension reform, the age at which pension payments begin is being gradually delayed.
Those who retired between 2024 and 2026 can receive pension from the age of 62, and those who retired between 2027 and 2029 can receive pension from the age of 63. After 2033, the age at which pension payments begin will increase to 65.
Accordingly, the period of not receiving pension after retirement age is gradually becoming longer.
However, the financial burden caused by the extension of the retirement age and the decline in new recruitment of young people were also pointed out as issues that need to be solved.
Professor Chae's research estimated that if the retirement age of general public officials and teachers is gradually extended to 65 years old, additional labor costs of 3.76 trillion won to 6.3 trillion won per year will occur depending on the wage adjustment method. The financial burden varied greatly depending on the level of reduction in the peak wage system and whether re-employment was introduced.
At the debate on this day, it was also pointed out that even if an extension of the retirement age is introduced, the method of only reducing wages while maintaining the workload should be avoided.
Kim Young-gun, a member of the wage and pension division of the Policy Planning Institute of the Korean Federation of Public Officials Trade Unions, introduced the case of Japan's retirement age extension and pointed out, "If wages are significantly lowered while extending the retirement age, the income gap may end up being replaced by a low income status."
Senior Vice Chairman Park argued that the early retirement pension cannot be a fundamental measure, saying, “The early retirement pension can fill the immediate income gap, but a reduction of up to 25% can be applied for life. It is not appropriate to use this as the only alternative to resolving the income gap.”
He then emphasized, “We must promote legislation linking retirement age and pension payment start age,” and “We must prepare transitional measures for public officials who have already retired or retire before the retirement age extension legislation.”
Professor Kim In-tae of the Department of Social Sciences at Hansung University suggested that differences depending on occupation and working environment should be considered when preparing measures to extend the retirement age and resolve the pension income gap.
Professor Kim emphasized, “It is necessary to distinguish between cases where the same job continues, cases where responsibilities are transferred to a different job, and cases where working hours are reduced, and compensation standards must be designed according to each job, responsibility, and working hours.”
Regarding concerns about a decline in new recruitment of young people due to the extension of the retirement age, he said, "It is reasonable for the government to identify vacancies by institution and series and new jobs needed in artificial intelligence, science and technology, social welfare, etc., determine the scale of recruitment, and bear the necessary financial resources."
This debate was co-hosted by Rep. Lee Yong-woo of the Democratic Party of Korea and Rep. Lee Dal-hee of the People Power Party, and co-organized by the National Government Employees' Union and the Federation of Government Employees' Trade Unions of the Republic of Korea.
