Rival parties approved Friday a bill to reform the deficit-ridden pension system for civil servants as the country scrambles to contain the costs of its fast-aging population.
The bill passed through the National Assembly 233-0 with 13 abstentions in the wee hours after the ruling Saenuri Party and the main opposition New Politics Alliance for Democracy (NPAD) reached a last-minute agreement on the passage.
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The parties hastily extended the on-going extra parliamentary session, originally set for closure Thursday, by one more day as their negotiations dragged on.
The legislation ended months of bipartisan wrangling over the pension reform drive championed by President Park Geun-hye.
Park has repeated calls for the passage of the reform bill aimed at reducing growing deficits in the civil servant pension fund as the administration pushes for reform and deregulation in a bid to invigorate the stagnant economy.
The civil servant pension reform bill requires government employees to contribute 9 percent of their monthly income to their pension scheme, raising the rate from the current 7 percent over the next five years, while shaving their pension payment rate to
1.7 percent from 1.9 over the next two decades.
In connection with the civil servant pension move, a special National Assembly committee and a social consultation group will be established to explore ways to revamp the broader national pension fund, including whether to improve pension benefits from the fund, according to a parliamentary rule also passed in the general meeting.
South Korea is facing a growing fiscal burden on its pension management due to the country’s fast-aging population, the result of grim birth rates.
The government warned that by next year it will be forced to use 10 billion won (US$9 million) of taxpayer money every day to backfill deficits stemming from civil service pensions unless the parliament passes the reform bill by early May.
In the face of the growing urgency, the rival parties had initially agreed to pass the bill through the National Assembly in early May, but the efforts fell through due to gaps over the issue of reforming the broader public pension system.
Both parties hailed the passage of the much-awaited reform bill, with ruling party leader Kim Moo-sung saying, “I am very grateful to have come up with a successful conclusion after so much tough processes.”
NPAD leader Moon Jae-in said, “I want to praise our party for leading the proper reform that will prop up the fiscal economy while properly guaranteeing post-retirement income.
Also approved in the early-morning voting session was a revised national health bill that requires tobacco sellers to put pictorial warnings about the dangers of smoking on cigarette packs. (Yonhap)
