After 10 months of discussion, a committee on national pension reform last week suggested three options, all of which fall short of ensuring the long-term sustainability of the pension scheme, now under increasing strain.

Differences in views between labor and business representatives barred the panel formed in October under the Economic, Social and Labor Council from working out a single proposal.

The first option calls for freezing the income replacement rate, which is set to be lowered to 40 percent by 2028 from the current 45 percent, and raising insurance premiums from 9 percent of wages to 12 percent in the coming decade.

Under the other proposals, the income replacement rate would be reduced as planned, with insurance premiums raised to 10 percent or remaining unchanged. Such options go no further than a separate set of reform proposals made by the Health and Welfare Ministry in December, which was criticized for being far from making the pension arrangement sustainable in the long term.

Earlier last year, the National Pension Service, with nearly 700 trillion won ($576 billion) in assets, predicted that its fund would be depleted by 2057 under the current system. Raising insurance premiums to 12 percent of wages with the income replacement rate kept at 45 percent would delay the depletion of the pension fund by six years at best.

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