Democratic Party moves to meet labor's demand for swift retirement age extension while addressing business concerns through expanded wage restructuring authority

So Byung-hoon, chairman of the Democratic Party of Korea's special committee on retirement age extension, delivers opening remarks at a meeting with field workers from the Korean Confederation of Trade Unions at the National Assembly members' office building on May 29. [Yonhap]
So Byung-hoon, chairman of the Democratic Party of Korea's special committee on retirement age extension, delivers opening remarks at a meeting with field workers from the Korean Confederation of Trade Unions at the National Assembly members' office building on May 29. [Yonhap]

The Democratic Party of Korea, which is pushing to raise the statutory retirement age from 60 to 65, is strongly considering a plan to begin phasing in the extension from 2028. The move reflects labor's longstanding demand for an early start. To address business concerns, the party plans to complement the measure by expanding employers' authority to restructure wages for workers who benefit from the extended retirement age.

The Democratic Party's special committee on retirement age extension has settled on a plan to raise the retirement age by one year every two years starting in 2028, reaching 65 by 2036. The committee plans to finalize the proposal after detailed consultations with labor groups, the business community, the government and Cheong Wa Dae, and aims to announce the plan as early as the end of this month.

The tentative plan largely reflects the position of labor groups, which have pressed for swift legislation. The party had originally presented three options to labor and business: extending the retirement age every two years starting in 2028 to conclude in 2036, extending it every two to three years starting in 2029 to conclude in 2039, and extending it every three years starting in 2029 to conclude in 2041. The committee has now decided on the option with the earliest start date.

However, the party also agreed to accommodate business concerns that extending the retirement age would increase corporate costs and dampen youth employment, by expanding employers' authority to restructure wages for workers covered by the extension. "The key issues are the timing of the retirement age extension and the scope of authority to restructure wages," a committee official said. "We have no choice but to offer a compromise that gives both labor and business something they want."

At the committee's meeting with the Korean Confederation of Trade Unions on May 29, committee chairman So Byung-hoon said, "If we cannot pass a law that everyone supports and everyone agrees to, we still need to start with a law that at least neither side outright opposes, even if some do not fully agree." He added that the committee would "seek maximum input to produce a plan with minimum disagreement."

The business community has consistently called for easing the requirements under the Labor Standards Act for changing workplace rules as they apply to workers with extended retirement. Under current law, employers must obtain the "consent" of a union or a majority of workers before making changes to workplace rules that are unfavorable to employees. Business groups want that requirement lowered to mere "consultation" for workers whose retirement age is extended.

The committee is instead approaching the issue through the Act on Aged Employment Promotion rather than relaxing the workplace rule-change requirements under the Labor Standards Act, given the broader implications such a change would have on wage systems overall. The aged employment law already requires employers who extend the retirement age to take necessary measures including restructuring wages, and the committee is looking to add detailed provisions to that framework. "We need a legal review of whether easing the workplace rule-change requirements would constitute age discrimination," another committee official said. "We will look for a reasonable way to allow wage adjustments."

The committee will hold a closed-door meeting Wednesday to continue discussions. It plans to announce the retirement age extension proposal by the end of this month and complete legislation this year. Democratic Party floor spokesperson Lee Ju-hee told reporters Tuesday that floor policy chief Han Jeong-ae had said the party would "reactivate the committee and ensure there is sufficient discussion during the second-half regular session of the National Assembly."


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