A presidential advisory panel on Thursday recommended South Korea gradually extend workers' employment until age 65 by 2033, as the country grapples with the economic and social pressures of a rapidly aging population.
The proposal, issued by the Presidential Economic, Social and Labor Council, follows a yearlong deliberation between labor and business representatives that ended without consensus. As a result, the recommendation is nonbinding and reflects the council’s independent position rather than a tripartite agreement with labor, management and the public sector.
South Korea’s legal retirement age remains set at 60, while eligibility for the national pension has been deferred to begin at 65 — a gap that has fueled mounting calls for reform. Labor representatives have urged the government to raise the legal retirement age in tandem with pension eligibility change, arguing that the disparity would leave aging workers without a safety net. Employer groups, however, have resisted legislative changes, favoring instead the use of individually negotiated contracts to extend employment beyond the retirement threshold.
The council's compromise proposal stopped short of recommending a change in the country's legal retirement age. Instead, it proposed a mandate requiring companies to retain workers who wish to continue employment until 65, using a set of flexible employment models.
The proposed framework includes three options. The first would allow older employees to remain in their current roles with unchanged hours and responsibilities. The second allows for continued employment with adjusted duties and compensation, taking into account factors such as health, safety, or business needs. A third model offers a special exemption for large corporations and public-sector employers — sectors typically favored by young jobseekers — enabling them to meet employment obligations by transferring older workers to affiliated companies within the same corporate group, thereby freeing up positions for new entrants to the workforce.
The council also proposed a two-year grace period through 2026 before the new system takes effect, assuming legislation is enacted within the year. Under the phased timeline, the continued employment age would increase by one year every two years between 2028 and 2031 — rising to age 62 in 2028-2029 and 63 in 2030-2031 — followed by annual increases beginning in 2032, ultimately reaching age 65 by 2033.
This phased approach would close the gap between the national pension eligibility age and the mandatory employment extension from a three-year gap in 2026-2027 to none by 2033.
shinjh@heraldcorp.com
