Under the proposals, wage earners' contribution rate will increase from 9 percent to 13 percent, while the ratio of pension benefits to the average income during the subscription period will be adjusted to maintain the current 42 percent. Originally set at 50 percent in 2008, this rate was decreasing by 0.5 percentage points annually and was projected to reach 40 percent by 2028.
The rate for wage earners' contribution has been fixed at 9 percent since 1998, marking a 26-year period without change.
The rate represents the portion of a subscriber's standard monthly income paid towards the national pension. For employees, this cost is split equally between the worker and the employer. Other subscribers such as self-employed individuals bear the full cost themselves.
If approved by the National Assembly and implemented next year, this will be the first increase in the insurance rate in 27 years.
Additionally, the revised plans propose raising the fund's return rate by 1 percent. The goal is to increase the long-term return rate from 4.5 percent to over 5.5 percent, extending the fund's projected depletion date from 2056 to 2072.
reporter
Park Sae-jin
swatchsjp@ajunews.com
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