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Apple Daily: Consensus for pension reform

Apple Daily: Consensus for pension reform

People have associated Greece's debt crisis with Taiwan's own financial problems, and there exists a collective anxiety in society that Taiwan's retirement pension system may go bankrupt one day.
Greece's retirement pension system is very similar to Taiwan's.
Greece's pension program has operated at a loss since 1984, and civil servants account for 10 percent of the country's population. The high pay and lucrative retirement benefits enjoyed by Greece's civil servants are incomparable to other countries in the world except Taiwan.
What is worse is Greece's senior citizens account for 20 percent of the country's population. Last year alone, the Greek government spent NT$930 billion on retirement pensions, accounting for 25 percent of its total expenditures. With social welfare programs taking 35 percent of government spending, many items were crowded out, leaving few resources to boost the country's sluggish economy.
Greece has attempted to reform its pension system four times since 1984, but the efforts ended in failure due to populist and election pressure.
According to Business Today magazine, Taiwan will catch up with Greece in 2015 in terms of senior citizens as a percentage of the population. And Taiwan's pension program for retired civil servants is even more lucrative than Greece's.
In Taiwan, the income replacement ratio of retired civil servants reaches 95 percent, with some even exceeding 100 percent. The income replacement ratio of Greece's civil servants averages only 56 percent at present.
The average retirement age of Taiwan's civil servants is 55, while that of Greece has been extended to 67. A survey conducted by Business Today shows that 79 percent of civil servants and 82 percent of private-sector workers are in favor of pension reforms, including lowering the income replacement ratio and extending the retirement age. Since there is already a consensus in society for pension reforms, there should be no more waste of time.
Unless Taiwan reforms its pension system, pensions will account for 23 percent of Taiwan's total government expenditures 10 years from now. That will be a level sufficient to make a country bankrupt. (Editorial abstract -- July 10, 2015) (By Y.F. Low)


Updated : 2021-09-17 12:27 GMT+08:00