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Pension fund for military personnel at stake

Pension fund for military personnel at stake

Taipei, Feb. 4 (CNA) The financial situation of the state-run Pension Fund for Defense Personnel is at stake and it might go bankrupt in a few years, an official of the Ministry of Civil Service said Thursday.
The fund recorded NT$8.421 billion (US$263 million) in revenue last year, outpacing its spending of NT$6.365 billion, the official said. Although spending did not exceed revenue in 2009 as had been expected, he warned that the possibility of the fund going bankrupt by 2018 remains and predicted that a planned voluntary military service system will deal a further blow to the fund.
As of the end of December last year, the fund had to pay out NT$63.33 for every NT$100 in revenue, according to a ministry report.
Worse yet, a voluntary military service system could incite a wave of early retirements among existing career military personnel, while newly recruited personnel, after serving only three years, might have paid NT$70,000 to their retirement fund, but would receive more than NT$100,000 from the pension fund when quitting under the existing rules, the official explained.
To keep the pension fund from going broke, the government must increase its contribution rate of 12 percent to a range between 30 percent and 40 percent on the military personnel, he suggested.
Should the contribution rate for individuals be raised, the portion sustained by the government should also be hiked, which would further worsen its finances, he went on.
Over the long term, adjustments in the military's retirement system will be necessary to improve the situation, the official said.
At present, Taiwan's military personnel on average are entitled to receive retirement pay 8.29 times the total amount of money they pay into their pension funds, higher than the 5.97 times for teaching staff and the 5.43 times for government employees, according to the ministry.
(By S. P. Yeh and Flor Wang)




Updated : 2021-10-21 19:23 GMT+08:00