Taiwan News, Staff Writer
2013-01-23 03:02 PM
Retired civil servants who entered government service before 1995 receive a preferential interest rate of 18 percent, a measure which is widely seen as expensive in times of economic crisis and as unfair toward other groups in society.
The government is expected to present its plans for retirement reform on January 30, while discussions within the Examination Yuan have reportedly been brought forward to January 25, reports said.
The need for the 18 percent to be reduced was not just part of a consensus between the Executive Yuan and the Examination Yuan, but was also a consensus among the majority in society, Chen said in an interview published by the Chinese-language China Times Wednesday.
He said the system had been designed when salaries for government employees were at a low level, but those improved significantly during the 1990s. The raise in basic wages for civil servants was the main reason for abolishing the 18 percent interest rate for those who joined government service after 1995, he said.
Chen did not reveal a timetable or a size for the reduction of the preferential interest rate, though some sources have suggested 12 percent as the new rate. The premier said he would not suggest a certain rate because that was the prerogative of the Examination Yuan, which handles affairs concerning civil servants.
Changes to the system introduced by the Examination Yuan had the aim of gradually phasing out the preferential interest rate altogether, the premier said. At first, the number of years in government service became a factor, while the fact that civil servants became younger would indirectly result in the ending of the system.
The Ministry of Civil Service said it was absolutely certain that the 18 percent rate would be cut, but it had not been decided yet by how much and over what kind of time span.
Vice Minister Wu Chung-cheng said the government’s new plans for pension reform were far-reaching as they would involve retirees, current civil servants and newcomers. All conditions for payments and pension requirements would have to be considered under the reforms, he said.
In addition to civil servants, the Ministry of National Defense would deal with military pensions and the Ministry of Education with teachers, Wu said. After those departments reached an agreement, the Cabinet and the Examination Yuan would still need to talk before discussing a single overall reform package, according to Wu.
The main opposition Democratic Progressive Party called on Chen to move ahead with his reforms and not retract proposals at the first sign of discontent within government ranks. The Taiwan Solidarity Union said Wednesday that only a cut of the preferential interest rate to at least 8 percent would be fair.
The administration of President Ma Ying-jeou has come under fire from all sides for the mishandling of severe financial problems facing the nation’s pension and social security systems. Ma turned down an opposition demand for a National Affairs Conference to discuss the key issues, while some of his own reform proposals were shot down by vested interests within his own Kuomintang.