Korea may raise retirement age to 60: report

The government is reportedly considering raising the average retirement age to 60 from the current average of 57 to lessen the impact of the retirement of 7.1 million baby boomers born between 1955 and 1963.

However, the plan is expected to face fierce opposition from both employers and employees.

The “Baby Boomer Committee,” an affiliate of the Economic and Social Development Commission, a group representative of employers, employees and the government, is planning to submit a related bill to the National Assembly.

“We haven’t decided on any details yet. But it is true that the Ministry of Employment and Labor have been confuting on the extension and to a certain point we all admit the necessity,” an insider of the committee said.

Currently, high-ranking civil servants retire before they are 60 years old. Low rankers will also be able to retire over 60 from 2012. In the private market, the average retirement age is 57.16 but many leave their posts around 53.

The submission would be timely since society needs more than three years as a grace period before execution, and signs of society’s aging are already evident.

The extension has been long talked of. According to a previous survey by online recruiter SaramIn of 241 member employers, 61.4 percent said the rise in retirement age was necessary. About 49 percent said they needed the skills and experience of older workers, followed by companies seeking stability, craftsmanship and other qualities.

However, the plan is not welcomed by businessmen.

The Korea Employers Federation said the discussion on the postponement of retirement age is too early, since employers have to pay higher salaries to older workers under the current system.

“Unless we adopt flexible salary system, such as wage peak system, in which aged workers reduce both their work hours and wages by half in exchange for guarantee of employment, the lift will incur loss,” a spokesman was quoted by saying to the Seoul Shinmun daily.

He said the retirement age will be drawn up between the employers and employees and that the government should not intervene. He said some fields, such as the construction industry, already hire retirees as temporary workers with good salaries.

The postponement of retirement age is a hot issue in other countries, too, as they also face low birthrates and aging societies that could lower productivity.

As a response, Spain and several others have decided to increase the mandatory retirement age to 67 from 65 and France is also pushing to make it 67 from 60, despite threats of a general strike from labor unions.

“We will need to solicit the issue in public because Korea is definitely one of the fastest aging countries,” an insider of the labor ministry said. The authorities have posted their intension and the necessary details on their website.

By Bae Ji-sook (baejisook@heraldcorp.com)