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Taiwan Examination Yuan discusses pension reform
President Ma Ying-jeou to announce plans on Jan.30, DPP on Jan.28
Taiwan News, Staff Writer
2013-01-25 05:07 PM
TAIPEI (Taiwan News) – A postponement of the retirement age came up during discussions Friday by the Examination Yuan and the Ministry of Civil Service about the government’s pension reform plans Friday ahead of an announcement by President Ma Ying-jeou expected on January 30.

The government has been under pressure to come up with measures to save the country’s social security and pension systems from bankruptcy, while also facing criticism over its reluctance to tackle benefits for present and former civil servants.

The opposition Democratic Progressive Party said it would present its plans for reform next Monday, two days ahead of Ma’s news conference.

The proposals under discussion by the Examination Yuan Friday included the postponement of the retirement age to 65 from 60 to be introduced in 2016, reports said. The measure would exclude police officers, firefighters, nurses and doctors.

At present, civil servants can retire at the age of 60 after having served 25 years or at 55 after 30 years of service, a formula known as the ’85 system.’ The latest proposals would replace it with a ’90 system.’

The package included several new ways of calculating pensions and bonuses for current and new civil servants, but did not mention any solution for the problem of 18 percent preferential interest rates, reports said.

Critics have blasted the benefits for civil servants, teachers and military staff who retired before July 1995 as unfair and expensive, but despite years of discussion, no government has ever dared to change the system.

Media quoted government officials earlier this week as saying the 18 percent might first be cut to 12 percent, but later statements contradicted the reports. Chen said there was a consensus in society at large that the preferential interest rate needed to be cut, though he did not provide any details.

Examination Yuan President John Kuan spoke of a gradual approach which would exclude wealthier retirees from the benefits while continuing to take care of lower incomes.

The 18-percent formula might be kept, though changes might be implemented which would prevent retirees from receiving more money than when they were still working, reports said.

An estimated 429,000 retired government employees benefit from the 18 percent, including a group of 190,000 former military personnel, reports said. Former teachers receiving the payments number 110,000 and other retired civil servants 120,000.

An estimated 12,000 ex-teachers received more than NT$50,000 (US$1,700) per month from the interests, though the majority of beneficiaries drew less than NT$30,000 (US$1,000), reports said.

Associations representing civil servants have criticized government plans for overestimating the amounts of money their members receive under the existing system, while critics have faulted the government for dragging its feet. The ruling Kuomintang was drawing back from reform because it was afraid of offending some of its own key voting blocs, critics said.

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