Pension reform most complex in past 60 years: Ma
By Adam Tyrsett Kuo, The China Post
February 7, 2013, 12:03 am TWN
TAIPEI, Taiwan -- President Ma Ying-jeou said yesterday that the administration's annuity and pension reform plan is perhaps the most complex reform that the government has undertaken over the past six decades given the scope of its effect.
Chang Che-shen (張哲琛), head of the Ministry of Civil Service, Huang Fu-yuan (黃富源), head of the Directorate-General of Personnel Administration, and Pan Shih-wei (潘世偉), head of the Council of Labor Affairs, yesterday spoke at the Kuomintang's weekly Central Standing Committee meeting.
The three gave reports on their respective branches' annuity and pension reform plans regarding laborers, civil servants, military personnel and public school teachers.
After hearing their reports, Ma said that the financial problems of the different funds can all be traced to similar roots, and those are early retirement, decreasing birth rates, an aging population and the disproportion between premium payments and retirement benefits.
In addition to formulating pragmatic, gradual and transparent policies to ensure the funds' stability, the government needs to address the aforementioned problems directly, which necessarily means increasing premiums, decreasing benefits and pushing back retirement ages, Ma said.
If something isn't done now, the pension fund of military personnel will be the first to face bankruptcy in 2019, followed by that of laborers and public school teachers in 2027, as well as that of civil servants in 2031, Ma stressed, adding that people regardless of political affiliations have come to realize that these are problems that the nation needs to face as one.
The president went on to say that apart from the government's recent push for reform, the administration has been trying to initiate changes over the past several years, which include pushing back retirement ages for civil servants, levying taxes on military personnel and public school teachers, lowering income replacement rates, decreasing the amount of money allowed for civil servants to save at an 18-percent preferential interest rate, as well as cutting annual year-end bonuses for state sector workers.
Those measures, however, pale in comparison to the upcoming reforms, which will affect at least 10 million people, Ma said, adding that if one were to include the family members of those 10 million, there will be very few that aren't affected.
Given the reforms' scope of effect, the administration has to treat the matter very carefully, the president said, adding that the government plans on submitting drafts in April for the Legislature's deliberation.
Ma further explained that the government plans on conducting re-evaluations of the nation's pension and annuity programs every five years, in order to cope with variables such as birth rates.
The president went on to say that after numerous discussions and exchanging of opinions, the administration has become a great deal more confident in its ability to tackle these problems.