Seoul: The ruling People Power Party (PPP) and the main opposition Democratic Party (DP) have reached an agreement to establish a special parliamentary committee focused on pension reform. This decision was made on Wednesday, and consultations with the government are planned for later this week.
According to Yonhap News Agency, PPP floor leader Kweon Seong-dong and his DP counterpart, Park Chan-dae, will engage in talks on Friday to address their differing views on the nation's pension system. The special committee is set to manage structural reforms, while parametric reform remains a contentious topic. DP Representative Park Sung-joon mentioned that a conclusion on this matter is expected after additional discussions with the government on February 28.
Parametric reform is centered on adjusting the contribution rate and income replacement rate without altering the fundamental pension system. Last year, both parties acknowledged the necessity of increasing the premium rate from 9 percent to 13 percent. However, they have yet to agree on the income replacement rate, which determines the pension as a percentage of a subscriber's average income over their lifetime.
The PPP has advocated for the establishment of a special committee to address both structural and parametric reforms. In contrast, the DP has argued that parametric reforms should be managed by the standing committee on welfare.