Updated August. 25, 2014 04:36
A ranking official at the Presidential Office said on Sunday, The government has decided to reform the Government Employees Pension in conjunction with the National Pension, announcing the direction of reform of the civil servants pension. As the framework to reduce civil servants pension payment by comparing it with the National Pension has been fixed, the effort to reform the pension for civil servants will likely pick up speed.
Controversy will likely flare up, however, because the government plans to increase the severance allowance, one-off payment provided to a civil servant at the time of his or her retirement, within the scope of a cut in the civil servants pension.
The ranking official at the Presidential Office said, The plan to reshuffle the Government Employees Pension contains a provision to link it with the National Pension, adding, We will change the system by considering the criticism that while fiscal deficit is growing, government employees are enjoying excessive benefits. On reshuffle of the Government Employees Pension, the government previously claimed nothing has been decided, but it has thus disclosed the specific direction of change in the pension for the first time.
In a related move, the Government Employees Pension improvement committee, the Security and Public Administration Ministry, the Strategy and Finance Ministry and the ruling Saenuri Party will determine the ratio of reduction in the government employees pension and the ratio of hike in severance allowance.
A source at the Presidential Office said, By considering the possibility that retired civil servants could face a rapidly deteriorating situation during the post-retirement era, the government will increase the retirement allowance to the level of private companies within the scope of a cut in the government employees pension.