[News Today] NEED FOR RETIREMENT AGE EXTENSION

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Starting next year, over 9.5 million 'second baby boomers' will begin retiring. They face an 'income cliff' of up to five years before receiving national pensions. There are ongoing debates about extending the retirement age, as retirement for public service positions have recently been shifted up to 65. We look at when this could take effect legally.

[REPORT]
Soundbytes: See you later.

After retiring from his job at a bank, 62-year-old Hong Wang-ki drives his wife to work every day.

The first generation of seven million baby boomers like Hong all passed their legal retirement age of sixty last year.

This year, the second wave of boomers who number 2.5 million more than the previous generation start retiring from their jobs.

Many of them face a so-called 'income cliff' until they become entitled to their post-retirement pension benefits.

Kim Hyeon-seok/ 60-year-old Retiree
I don't think many people got ready for their post-retirement years. I'm not prepared either.

Since the pension reform in 1998, the pension claimable age has gradually risen. Starting in 2033, people become entitled to receive pension when they turn 65.

That means that those who are 55 years or younger born after 1969 face a period of five years without income.

Given these circumstances, government worker unions are negotiating for an extension of retirement age.

Kim Ho-seong/ 63-year-old Retiree
This is when I need money more than ever. Children need to adjust to their jobs and get married.

The labor industry demands to lay down the legal retirement age at 65.

Kim Jong-jin/ Dir., Korea Worker Institute
The retirement age should be specified in the laws as 65 so that it wouldn't be changed arbitrarily.

Employers are concerned about mounting financial burden on businesses.

Prof. Lee Ji-man/ School of Business, Yonsei Univ.
Let's calculate the total labor cost. Under the salary step system, the wage at the time of retirement is 3.3 times higher than the starting salary.

The Economic, Social and Labor Council overseeing the issue said a labor-management agreement will be ready by the first quarter of next year at the latest.

Kwon Gi-seob/ Chair, Economic, Social and Labor Council
Discussion to reform the national pension system is underway, so we can't slow it down.

The Council will hold a public hearing next month to discuss concrete action plans such as details regarding the retirement age extension.

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