S. Korea's Democratic Party eyes retirement age extension starting in 2028

The Democratic Party of Korea, which is pushing to raise the statutory retirement age from 60 to 65, is leaning toward a plan that would begin extending the retirement age in 2028. The approach aligns with labor unions' longstanding demand for an immediate start, while employers would receive expanded authority to restructure wages for workers who stay on past the current retirement age.

The 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 and business groups as well as the government and Cheong Wa Dae, with an announcement expected as early as the end of this month.

The tentative plan reflects labor unions' calls for swift legislation. The Democratic Party had originally presented three options to labor and business groups: extending the retirement age every two years starting in 2028 and completing the process by 2036; extending it every two to three years starting in 2029 and finishing by 2039; and extending it every three years starting in 2029 and wrapping up by 2041. The party has now decided to go with the fastest of the three.

However, the committee also agreed to expand employers' authority to restructure wages for workers covered by the extension, in a nod to the business community's concerns that a longer retirement age would raise corporate costs and dampen youth employment. A committee official said the key issues are the timing of the extension and the scope of wage restructuring authority, adding, "We have no choice but to put forward a compromise that gives labor and business each something they want."

At a meeting between the committee and the Korean Confederation of Trade Unions on May 29, committee chair 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 to maximize input and minimize disagreement.

The business community has consistently called for easing the requirements under the Labor Standards Act for changing workplace rules that apply to workers whose retirement is extended. 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 covered by the retirement age extension.

The committee is approaching the issue through the Act on Promoting the Employment of the Elderly rather than amending the Labor Standards Act, given that loosening the workplace rule-change requirements could have far-reaching implications beyond retirement age policy. Under the elderly employment law, employers who extend the retirement age are already required to take necessary measures including wage restructuring; the committee is looking to add more specific provisions to that framework. Another committee official said a legal review is needed to determine whether easing the workplace rule-change requirements could run afoul of age discrimination protections, adding that the committee "will find 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 the 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 sufficient deliberation during the second-half regular session of the National Assembly.