Civil servant pension plan still better than laborers', official says
By Lauly Li, The China Post
February 20, 2013, 12:02 am TWN
TAIPEI, Taiwan -- Civil servants will still enjoy a better income replacement rate than laborers after the nation's upcoming pension reforms take effect, a Ministry of Civil Service (MOCS) official said yesterday.
The ministry will host 33 conferences from now until March 19 regarding the issue of pension reform. In the first conference held yesterday, Lu explained that the reform plan will affect retired, current and newly employed civil servants.
The existing pension system was successful in attracting talented people to work for the government, Lu said, but added that the “Rule of 85,” in which years of employment plus age equals or exceeds 85, meant many civil servants were eligible to receive retirement benefits at the age of 55.
Regarding pushing back the retirement age, Lu said that even though many people have raised objections to such an idea, there is a global trend toward a “Rule of 90,” adding that the original system's pension spending is increasing.
Some of the attendants at the conference asked Lu whether it is possible there would be another alteration to the pension system in the near future.
Lu said he has discussed the issue with his superiors and that they agree the pension system cannot continuously be altered. He added that he hopes the latest pension reforms can be the last for at least 20 years.
Civil servants who attended the conference said that it was not fair to mention the packages offered to civil servants and laborers in the same breath, as under current laws laborers are allowed to choose between the old and new system — a choice not granted to civil servants.
The civil servant reforms were not drawn up to compare with the laborer pension reforms, but to resolve the pension system's financial problems, Lu said. Nevertheless, regardless of the degree of the reform, the civil servant pension system is still better than that of laborers, Lu added.
Under the new system, a civil servant with 35 years of service will enjoy an income replacement rate of at least 60 or 70 percent.
Criticism over the reform plan also came from an attendant from the Council for Economic Planning who said t it was not fair to ask the civil servants to pay for the pension system's financial problems given that it should be the Ministry of Finance's responsibility and not the MOCS's.