Taiwan lawmakers do away with 18-percent rate for retired civil servants

DPP proposal cuts rate to 9 percent after one year, zero after two

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A DPP lawmaker shows his support for doing away with the 18-percent rate.

A DPP lawmaker shows his support for doing away with the 18-percent rate. (By Central News Agency)

TAIPEI (Taiwan News) – A long-criticized 18-percent preferential deposit interest rate on savings for retired civil servants will be phased out after two years, according to a ruling party proposal approved by the Legislative Yuan Friday.

The rate has come under fire for many years as it was seen as an unfair benefit for retired government employees, military personnel and teachers, and out of reach for most other working Taiwanese.

A voting battle Friday pitched the ruling Democratic Progressive Party proposal for a two-year phase-out against the opposition Kuomintang version, which would have gradually cut the interest rate by 3 percent at a time over a period of six years.

As the DPP holds an absolute majority, its proposal passed the second reading, which means that the interest rate will be cut by half to 9 percent after the first year and to 0 percent following the second year.

The Legislative Yuan has been holding a special session concentrating on issues concerning the reform of unfair pensions, a major policy plank of the DPP government.