New pension systems come into force Sunday

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Monthly pension for military personnel will be NT$38,990. (Max Pixel)

Monthly pension for military personnel will be NT$38,990. (Max Pixel)

Taipei, June 30 (CNA) New pension systems set to impact an estimated 333,000 retired public servants, teachers and military veterans, come into force on Sunday.

The pension reform plan for civil servants, which were passed by the legislature last year, sets a minimum monthly pension payment of NT$32,160 (US$1,085) for public school teachers and civil servants.

A separate pension reform bill proposed by the Cabinet for military personnel, which was approved by the Legislative Yuan on June 20, set the minimum monthly pension for retired military personnel at NT$38,990.

Also 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 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.

According to a government estimate, the new pension reform will affect about 63,000 military veterans, 130,000 public servants and 140,000 public school teachers.

The reforms haves angered various civic groups and retired civil servants who have called for a Constitutional interpretation of the pension reform bills.

However, Minister Without Portfolio Lin Wan-i, who heads the pension reform committee under the Presidential Office, said the possibility of a future Constitutional interpretation will not prevent the new pension system going into force Sunday. (By Hsieh Chia-chen, Matt Yu and Ko Lin)