Special interest rate of ex-civil servants likely to be lowered: premier
By Ann Yu ,The China PostTAIPEI, Taiwan -- Premier Sean Chen has revealed that the hotly debated 18-percent preferential interest rate for ex-civil servants is expected to be cut to a lower rate.
January 24, 2013, 12:03 am TWN
According to reports, Chen said that both the Cabinet and Examination Yuan have an agreement that the interest rate needs to be lowered.
As for Chen's views, he said he believes that the 18-percent interest rate requires adjustments over time to fulfill different generations of civil servants' needs, the reports said.
For instance, Chen said that setting a threshold so that only those who entered the program before 1995 could receive the 18-percent benefit meant that changes in society have allowed civil servants to depend less on the preferential interest rate.
The 18-percent interest rate was a policy launched nearly two decades ago to support civil servants, who were mostly financially underprivileged. Retired civil servants who entered the program before 1995 could enjoy depositing a portion of their pension into a savings account with an 18-percent interest rate.
When asked about the attacks on the changes, Chen said that system reforms naturally draw complaints, but it is important that the government sincerely connect with the people.
Labor Pension Changes
For the labor pension schemes, Chen explained that the retirement program for laborers would remain the same while there would be some tweaks for the labor insurance program, the report said.
While many laborers were worried that the reform would demand a higher premium rate but fewer benefits, Chen said that the reform would still ensure that workers receive good benefits with low premium rates. “Just not as much as now,” Chen said, according to the report.
Chen said that it was a natural reaction for the labor sector to reject a lower benefit program, the reports said, but he also urged different sectors and different generations to understand the concept of “mutual consideration.” The whole idea of the reform is for the systems to function properly and continuously, he said.
Year-end Bonus Institutionalization
During a recent interview, Chen mentioned the highly debated year-end bonus for civil servant retirees. He said that the Cabinet was making drafts for institutionalizing the bonuses.
As the year-end bonuses were slammed by lawmakers last year for taking up a significant portion of the nation's budget, the Cabinet proposed to revise the bonuses for those who were financially disadvantaged and those who were killed or injured in the line of duty.