Sun, Jan 20, 2013 - Page 8 News List

Cooperation required for the pension program

By Jack Lee 李允傑

The reform of the pension program is Taiwan’s most significant systemic reform in 30 years. There are two special characteristics to the reform: On the one hand it is a comprehensive issue involving more than 10 million salaried workers, military personnel, civil servants and public school teachers. It covers almost all sectors and it spans across party lines, professions and social groups.

On the other hand it is a very specialized issue. The scope of reform, the income replacement ratio, premiums, payment standards and insurance fund performance require delicate financial calculations. In other words, it is a very complex undertaking involving both political issues and expertise.

Having learned lessons from the fuel and electricity price hikes and the capital gains tax on securities transactions, the government has adopted a more sophisticated approach to handling pension reform, emphasizing bottom-up policy formation. It has already held 122 seminars on the issue, with more than 10,000 participants.

The government also invited representatives from political parties, civil servants’ and veterans’ associations, teachers’ unions, and industry and commerce associations to discuss the reforms. Seeing such a combination of grassroots democracy and deliberative democracy has been refreshing.

Deliberative democracy has been adopted in Western democracies for many years and its purpose is to enhance representative politics. The practice stresses the importance of diversified participation, dialogue and communication through public hearings and community forums to encourage the public to think collectively about solutions to major issues through rational consideration and public decisionmaking.

It is an attempt to create a situation in which all parties acknowledge each other’s values, viewpoints and interests and then to find a solution that considers public interest and is acceptable to all those affected, thus implementing democracy in the problem-solving process.

The pension issue involves government agencies, social classes, intergenerational justice, financial sustainability and the public’s economic security, which is a core public interest.

Pension system reform requires a comprehensive overall approach, meaning that proposals from bureaucrats are not the only valid ones. The conflicts of interest involved require political negotiation, meaning a closed-door approach is doomed to fail.

By communicating, the government and public can consider the issue together, helping to discourage obstruction from individual professions or groups. If a conclusion can be reached together, social groups will gain a deeper sense of participation and self-centered approaches can be defused. This will assist the formation of a collective identity and consolidate shared values.

The government could expand transparency and participation during the reform process. First, it could employ publicly trusted actuaries to conduct a thorough review of the pension program’s financial situation. It should publish this information along with actuary formulas. Second, it could broadcast seminars and public hearings on the issue and publish relevant information.

Only by expanding public participation and continuing policy dialogue can Taiwanese implement the core values of constitutional democracy: fairness, justice, representativeness and participation.

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