Friday, May 9, 2014
Via the Korean Herald (op-ed piece):
After many twists and turns, the National Assembly has finally passed the controversial “basic pension” bill, enabling President Park Geun-hye to make good on one of her key election pledges.
The Assembly’s action on the bill was much belated but welcome. The legislation, which is expected to go into effect in July or August, will benefit the poorest 70 percent of Koreans aged 65 or older.
Specifically, about 4.5 million of the nation’s 6.4 million senior citizens will receive a monthly allowance of between 100,000 won and 200,000 won[about $100-200], depending on their income. Of the beneficiaries, about 90 percent will receive the maximum 200,000 won.
This scheme is not exactly the same as what Park promised on the campaign trail. During the election campaign, she promised to pay a uniform monthly allowance of 200,000 won to all citizens aged 65 or older, regardless of their income. But it was increasingly clear that Park’s universal pension plan was beyond the government’s financing capacity. So last September, the government decided to scale it back.
The basic pension scheme, even in its original form, is hardly sufficient to eliminate widespread poverty among senior citizens. Korea’s relative poverty rate among elderly people stands at 49.3 percent, the highest among OECD nations.