President-elect Park Geun-hye pressed her determination to carry out her controversial campaign pledges on a new pension program, despite growing concerns over financial instability and problems with fairness.

“The country has the highest elderly poverty rate among other OECD-member countries. (The government) must solve this problem,” Park said during a brainstorming session with the transition committee held on Friday.

Expressing her strong will, Park requested government officials and members of the handover team to map out new policies with firm intention.

“If I have made a promise, you should be responsible (to carry out pledges),” Park was quoted as saying by her spokesman.

Park also made it clear that funding for the new pension scheme will come from taxes, not from other kinds of publicly raised fund.

“(The source of finance) should come from tax, not from other funds. … We have a moral obligation to support the elders who have dedicated their lives (to build wealth) for the country,” she said.

It was the first time that the president-elect has publicly made detailed comments on the issue. Park has vowed to offer 200,000 won in monthly pension to all elderly aged 65 and older, to support senior citizens in poverty. However, questions have risen over the financing for the new pension program, soon after the handover committee suggested that the incoming government may consider using part of the fund managed by the National Pension Service.

The idea drew strong opposition from subscribers of the pension fund as they worry that non-subscribers would also get benefits from the money they paid over many years and that they might have to wait longer to receive their pension if the fund runs out. Currently, subscribers to the state-run pension service start to receive the monthly allowance, in regard to their previous income level, at the age of 61. However, some reports warned that the government might have to lift the start-up age for pensioners to 68 by 2034.

Other critics have argued that her pension scheme resembles programs already practiced in western countries many years ago and that proved to be inefficient. Even Nordic countries have been curbing expenditure on the state subsidies or abolishing some of universal pension programs due to worsening deficit, according to reports.

“Korea is expected to suffer greatly from a lack of financial sources as the country rapidly becomes an aging society and its relatively short experience in pension operation. To have sustainable pension programs, (the government) needs to reach social consensus on its (new) pension system and operation methods,” Yoon Seok-myung, a researcher at the Korea Institute for Health and Social Affairs.

Not only the pension scheme but also other welfare plans introduced by the incoming leader have been at the center of political debate, with her opponents calling them “obvious populist ideas.” Incumbent government officials also confronted her saying the plan will cost much more money than what her campaign team has estimated.

Park, however, defended her welfare ideas on Friday, saying that they are not all about spending taxpayers’ money but to support people to become economically productive again.

“Countries like Sweden are implementing many welfare programs but they didn’t become a threat to their (economic) growth. Rather, such programs have contributed in the development (of their economic growth). (I) wish we could approach (welfare issues) like them,” she said.

“(Many think that) welfare is about spending money. But if we don’t have welfare ideas in line with (economic) development, we would never create a virtuous cycle to improve the quality of lives of people,” Park added.

Her comments drew mixed reactions from critics, with some welcoming her firm beliefs on welfare and others warning her explanation still lacks of feasibility.

“This was the first time that Park stressed her will to carry out the welfare plan after the election. (I was) glad because she has firm beliefs in her plan,” said Hansung Univ. professor Kim Sang-jo.

Others said the plan will pass serious financial burdens onto younger generations and needs to go through a reality check again.

“The plan will become a big financial threat to the aging society where the number of young (taxpayers) substantially will be reduced.

“Her principle (on supporting the elders and the weak) is a right thing to do, but (the incoming government) needs to weigh the benefits against the cost,” said Hanyang Univ. professor Ha Joong-kyung.

Meanwhile, Park’s welfare plans entered a new stage on Sunday as a law obligating the government to redesign welfare policies every five years went into effect on Sunday.

The “social security basic law,” also known as the “Park Geun-hye welfare law,” was introduced by Park, then a lawmaker during her previous parliamentary term and is expected to lay the groundwork for Park’s vision aimed at turning Korea into a welfare state.

The law calls for the central government to draft “basic five-year social security plan” and introduce fundraising measures. The first five-year period is set for 2014-2018, during her presidential tenure.

By Cho Chung-un (christory@heraldcorp.com)