Taipei eyes options for pension reform
The China Post news staff
November 15, 2012, 12:08 am TWN
The China Post news staff--The government is looking at three major directions to reform the pension programs for its employees, including delaying the start to retirement payments, the Ministry of Civil Service (MOCS) said yesterday.
The Minister of Civil Service, Chang Che-shen, and other officials from the Examination Yuan and the Cabinet are scheduled to present a report on possible pension reform to the Legislature's Judiciary and Organic Laws and Statutes Committee today.
The report, which already arrived at the Legislature on the eve of the presentation, noted that pension programs for civil servants, military personnel and teachers have to be reformed because of several factors.
The number of retirees is rising, retirement age has been lowered and the nation's life expectancy is growing, which has heaped pressure on the government's finances, particularly at a time when the global economy is in distress, the report said.
The MOCS said it has set up an ad hoc committee to study possible reforms, and a proposal will be formally submitted to the Examination Yuan by the end of December.
Currently, the reforms are looking at three options: delaying the start to paying retirees their pensions, reducing the replacement rate and revising the annuity system.
Currently, the annuity is based on fixed sums that will be more than what civil servants contribute to their pension accounts. But the reform will change the annuity to sums comparable to the civil servants' contributions, the MOCS said.
The MOCS said that whatever reforms are adopted, the major premise is that it should be able to maintain a financial balance.
The changes are likely to primarily apply to newly recruited employees to the government sector, while existing ones will be considered separately, it said.