In the short term, perhaps it might be helpful for the government to lift the funds’ investment ceiling for foreign targets.
Next, it should relax the restrictions on investment targets and be more flexible with is asset distribution and operation. It should also allow the funds to invest in infrastructure, real-estate investment trusts and real-estate to increase earnings.
In the long run, the government should consider incorporating fund management, so it can decide independently over its personnel and finances. In addition, the establishment of a Taiwanese sovereignty fund supported by the nation’s five major funds for military personnel, civil servants, public school teachers, workers and the general public deserves consideration.
For a long time, welfare services have been held ransom to politics, with the result that politicians have been making irresponsible promises, turning Taiwan into a country with low tax revenues and developed welfare services. Since our pension programs are nearing bankruptcy, Taiwan should learn from Greece.
The government must show its determination to reform the pension programs, while the public must take a rational approach to the problem. If pension reform remains mired in political calculations and bargaining over the amendments and we remain unable to push resolutely for reform, the only alternative left is for us to go down together.
Lee Wo-chiang is a professor in Tamkang University’s Department of Banking and Finance.
Translated by Eddy Chang