Labor and business clash over retirement age as year-end deadline looms

Labor groups that want the retirement age raised to 65 and business groups that say the current legal retirement age of 60 should be maintained clashed at the National Assembly on the 23rd. The Democratic Party of Korea plans to unveil a compromise proposal as early as the end of this month. At the forum, one proposal called for a phased extension of the retirement age from 2028 to 2032, which would guarantee a retirement age of 65 for people born in 1972 and later.
The Federation of Korean Trade Unions (FKTU), the Korean Confederation of Trade Unions (KCTU) and others held a forum at the National Assembly with Democratic Party lawmakers Park Hong-bae and Lee Yong-woo, as well as Progressive Party lawmaker Jung Hye-kyung. The event was titled "Key Issues in Extending the Legal Retirement Age to 65 and Directions for Legislative Reform."
At the forum, labor groups pressed the ruling Democratic Party to complete legislation to raise the retirement age to 65 by the end of this year, as originally promised. They made clear that extending the retirement age is the answer to the income gap workers face after retirement.
Ryu Gi-seop, secretary-general of the FKTU, said, "The 'income crevasse' between retirement and the start of National Pension payments is a structural problem that is directly tied to the reality of South Korea, where the elderly poverty rate is the highest in the OECD." He added, "Extending the retirement age is the most direct and fundamental solution to filling that gap."
Han Seong-gyu, vice chairman of the KCTU, criticized reports that the Democratic Party is preparing a phased retirement-age extension plan and may hand over wage bargaining rights to business groups. He called for an immediate extension of the retirement age. He warned that if the retirement age is raised gradually from 2029, as some media reports suggest, the income-gap problem for workers born in 1967 and 1968 would be left unresolved.
Business groups, meanwhile, said they agree that old-age income security is necessary, but argued that extending the retirement age should not be the only option. Lee Sang-cheol, head of employment and social policy at the Korea Enterprises Federation (KEF), said, "A uniform legal extension of the retirement age would concentrate the benefits on large companies and regular unionized workers, deepening the dual structure of the labor market." He added, "It is difficult to achieve job stability for older workers simply by raising the retirement age." He then proposed maintaining the legal retirement age at 60 while preparing a special law and government support centered on a post-retirement reemployment system that would allow companies to flexibly set working conditions with eligible workers.
As the gap between labor and business remains wide over extending the legal retirement age to 65, attention is now turning to the compromise proposal that the Democratic Party Special Committee on Raising the Retirement Age is expected to release as early as the end of this month.
Meanwhile, Jeong Heung-jun, a professor in the Department of Business Administration at Seoul National University of Science and Technology, who delivered the main presentation at the forum, proposed raising the retirement age by one year each year starting in 2028. Under that plan, the retirement age would reach 65 in 2032. For those born in 1972, that would allow them to work until they turn 65 in 2037 and then begin receiving a pension immediately. Jeong also said it is important to ensure that raising the retirement age is balanced with youth employment measures. He explained that the public sector should introduce an additional staffing system, while the private sector should establish a job-sharing fund to guarantee new hiring for young people.
gowell@fnnews.com Kim Hyeong-gu Reporter