Premier asks for 3 months to draw up labor insurance plan
The China Post news staffPremier Sean Chen yesterday said the government will need at least two to three months to draw up plans to rescue the cash-strapped labor insurance program.
October 13, 2012, 12:06 am TWN
The premier told lawmakers that the troubles with the program began to appear 10 years ago but no one has since been able to find a solution, illustrating how difficult a problem it is.
“I would be lying if I promised to solve it in a month,” Chen said in response to demands by a lawmaker that the government draft measures to solve the insurance program's woes within a month.
“The government needs at least two to three months to tackle it,” said Chen during a question-and-answer session at the Legislature. He added that the government has already been exploring possible solutions.
The premier was under fire for much of the session over the possibility that the labor insurance program will go bankrupt in less than two decades.
Though the futures of millions of workers are at stake, finance authorities have reportedly rejected calls for the government to take full responsibility for the fund and ensure that retirees will receive their pensions.
The finance officials apparently have a different take on the program than the premier, with the former seeing it as an insurance policy and the latter defining it as a social welfare issue.
The premier repeatedly told the Legislature that the government will “definitely” take up the responsibility of keeping the program in the black.
Participation in the labor insurance program is mandatory for employees and employers, with both sides making monthly contributions to the pension fund. The fund is faced with a deficit by 2017 and may go bankrupt in 2027.
Labor Minister Pan Shih-wei has said that premiums may have to be raised to strengthen the program's financial health.
According to Legislator Wang Yu-min from the ruling Kuomintang (KMT), Taiwan workers pay low premiums but receive high pensions equivalent to 70 percent of their salaries — the third highest in the world after Greece and Spain.
In Taiwan, the premium rate is only 8.5 percent, compared to Germany's 19.5 percent and Japan's 14.99 percent, Wang said. Pensioners in Germany, however, only receive 40.5 percent of their salaries while those in Japan receive only 35.5 percent, the lawmaker added.
Some KMT lawmakers have proposed that the law be revised to require the government to subsidize the pension fund.