TAIPEI (Taiwan News) — The KMT-led legislature on Friday passed amendments that halted further cuts to the pensions of retired civil servants and public school teachers, halting the scheduled annual reductions in retirement income replacement rates.

With the KMT and TPP holding a numerical advantage, amendments to portions of the Civil Servants Retirement, Discharge and Pensions Act and Public School Employee Retirement, Discharge and Pensions Act passed the third reading, per UDN. The changes confirm that pension cuts for retired civil servants and teachers will stop, with replacement rates applied retroactively and maintained at 2023 levels.

Pension reforms pushed by the DPP under former President Tsai Ing-wen (蔡英文) took effect on July 1, 2018. Under the legislation, replacement rates for retired public servants and teachers were to be reduced annually over 10 years, from an original maximum of 75% and minimum of 45%, down to a maximum of 60% and minimum of 30%.

To address rising consumer prices in recent years, the amendments also specify that when the cumulative increase in the consumer price index (CPI) released by the Directorate-General of Budget, Accounting and Statistics reaches 5%, benefits should be adjusted in line with that increase, or at a minimum, reviewed every four years with appropriate adjustments. No adjustments will be made when CPI growth is zero or negative.

After the opposition parties jointly passed the bill halting pension cuts, President Lai Ching-te (賴清德) said that for the sake of Taiwan’s next generation, the government would “make every possible effort to study all available options and continue working toward a sustainable, fair, and just pension system.”

Cabinet Spokesperson Michelle Lee (李慧芝) said the legislature had disregarded current public servants by pushing through the bill. The Cabinet expressed deep regret and said it would fully defend the pension system.

KMT legislative caucus whip Fu Kun-chi (傅崐萁) said the DPP had called for comprehensive pension reform but implemented only half the measures. He said the DPP ignored the risk that the labor insurance system could go bankrupt as early as 2031. 

He accused the ruling party of stigmatizing retired military personnel, civil servants, and teachers, undermining the stability of the civil service and education systems. He said, “Halting the cuts to civil servant and teacher pensions is the first step in setting things right.”