South Korean employers' group urges phased re-employment over blanket retirement rise
In short
South Korea's employers' federation urged a phased approach centred on re-employment after retirement instead of uniformly raising the statutory retirement age. In an October 11 report, it cited Japan's experience and called for changes to pay systems and job roles alongside expanded employment for older workers.
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South Korea's employers' federation, Hanguk Gyeongyeongja Chonghyeophoe (한국경영자총협회), called for a phased approach to expanding employment for older workers rather than a uniform increase in the statutory retirement age. In a report released on October 11, it argued that companies should be able to choose re-employment arrangements that reflect their circumstances. The federation said discussions should consider youth employment, labour costs and the scope for changing pay systems. It based its recommendations on a study of Japan's policies and practices, including visits in March to government bodies, business representatives, researchers and companies. [ 1 , 2 , 5 ]
According to the report, Japan retained a statutory retirement age of 60 and allowed companies to choose between re-employment, extending retirement ages or abolishing mandatory retirement. Measures to secure employment through age 65 were introduced progressively, with an obligation covering all willing workers established in 2013 and fully applied from 2025 after transitional arrangements. The federation said implementation periods and negotiated selection criteria gave companies flexibility during a period of difficult youth employment. Workers accepted lower wages after re-employment, companies changed jobs and pay structures, and government support offset part of the wage reduction. The report put re-employed workers' average 2010 pay at 68.4% of their pre-retirement wages. [ 1 , 2 , 5 ]
The report described one Japanese company that reduced the emphasis on seniority pay and increased differentiation by job and performance, using resources freed up to improve re-employed workers' treatment. Another held repeated interviews before retirement to assess health, expertise and staffing needs before deciding on roles. The federation's employment and social-policy division head argued that raising retirement ages alone, while existing structural issues persisted, could weaken youth employment and deepen divisions in the labour market. He called for a flexible system centred on re-employment and company choice. [ 1 , 2 , 5 ]
Why it matters
The federation argued that extending retirement ages without addressing seniority-based pay and employment rigidity could reduce companies' capacity to recruit younger workers. It proposed giving companies options to balance older-worker employment with labour costs and new hiring.
Key facts
- The federation published a report on Japan's retirement-age policies and their implications on October 11. [ 1 , 2 , 5 ]
- Its report said Japan maintained a statutory retirement age of 60 while requiring employment opportunities through age 65, with full implementation in 2025. [ 1 , 2 , 5 ]
- It advocated re-employment choices, redesigned jobs and pay reform rather than a uniform increase in the statutory retirement age. [ 1 , 2 , 5 ]