South Korea's Basic Pension Reform Faces Hurdles as Minister Cancels Briefing

The South Korean government is pushing to overhaul its basic pension system, adopting a 'less for the rich, more for the poor' principle. The proposed changes aim to shift from the current system, which provides a uniform amount to the bottom 70% of income earners aged 65 and over, to a tiered approach based on the median income.

Starting next year, the income threshold for eligibility will be set at 90% of the median income, with plans to gradually lower it to 80% by 2030. This adjustment is expected to reduce the number of beneficiaries compared to the current standard, which is based on 96.3% of the median income. The government also intends to differentiate pension payments based on income levels.

Seniors below 20% of the median income could see their monthly pensions increase to 380,000 won next year and 400,000 won by 2028. Those between 20% and 40% of the median income would receive slightly less, with amounts around 359,000 won next year and 367,000 won by 2028. Pensions for recipients above 40% of the median income are expected to remain around 350,000 won.

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The pre-briefing for the basic pension reform plan was unavoidably canceled because some aspects of the basic pension reform plan have not been finalized.

However, the reform process is facing significant challenges. A scheduled press briefing by the Minister of Health and Welfare to explain the reform plan was suddenly canceled just an hour before it was to begin. The ministry cited that "some aspects of the basic pension reform plan have not been finalized," leading to the unavoidable cancellation. This abrupt cancellation suggests intense internal negotiations and potential revisions to the proposed measures.

Experts and welfare groups have raised concerns. One pension specialist warned that changing the selection criteria to be linked to the fluctuating median income could lead to a significant increase in beneficiaries being excluded, potentially sparking strong opposition from seniors. Welfare organizations also pointed out that any increase in basic pensions should not be offset by a reduction in other essential benefits, such as livelihood assistance.

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If the selection method changes to be linked to the median income, which changes every year, the number of beneficiaries will change, and more people will be eliminated than now. If the design is not meticulous, there will inevitably be strong opposition from the target elderly and increased negative public opinion.