President Tsai Ing-wen on Thursday apologized for the impact of the newly-adopted pension system on military veterans and thanked them for understanding the urgent need for reform.
Tsai held a press conference at 1:30 p.m. Thursday where she spoke about the passage of the reform bill by the Legislature Wednesday night.
Under the bill, the income replacement rate for military retirees who serve 20 years is set at 55 percent, with an increase of 2 percent for every extra year of service beyond 20 years until it reaches 95 percent for noncommissioned officers and 90 percent for commissioned officers.
The reform will not affect those whose pensions are less than NT$38,990 (US$1,280) per month.
For retirees who receive a monthly annuity payment, the 18 percent preferential interest rate on saving accounts will be scrapped over a period of 10 years, while it will be lowered by 2 percent every two years until it reaches six percent for retirees who receive a lump sum retirement payment.
The Cabinet has said the bill will go into effect July 1 in tandem with new pension systems for retired public servants and public school teachers that were adopted in July last year.
Tsai apologized to those affected by the pension reforms because of the need to changes their preexisting retirement plans.
At a time when the country's pension systems were in danger of defaulting in the not too distant future, most public servants, public school teachers and military personnel recognized the urgent need for financial sustainability to ensure the long term health of the pension systems, demonstrating their patriotism, Tsai said.
Tsai said she was particularly grateful to public servants, public school teachers, and military personnel. "I hope that all the uproar caused by the reforms over the past two years will soon come to an end. In my heart what I want to say more than anything else is thank you." (By Shih Hsiu-chuan)