Ruling and opposition parties reach compromise to lower payouts, but long-term viability of system remains in doubt
South Korea's National Assembly with two shaking hands overlayed, May 17, 2023 | Image: Korea Pro, Canva, edited by Korea Pro
South Korea’s ruling People Power Party (PPP) and main opposition Democratic Party (DP) agreed on pension reform on Friday, setting the income replacement rate — the percentage of a worker’s pre-retirement income paid out as a pension — at 43% after months of political deadlock.
The DP’s decision to compromise reflects political pragmatism ahead of a potential early election, and the agreement could lead to near-term political and financial stability.
South Korea’s ruling People Power Party (PPP) and main opposition Democratic Party (DP) agreed on pension reform on Friday, setting the income replacement rate — the percentage of a worker’s pre-retirement income paid out as a pension — at 43% after months of political deadlock.
The DP’s decision to compromise reflects political pragmatism ahead of a potential early election, and the agreement could lead to near-term political and financial stability.
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