Taiwan thinks it is Greece
Examination Yuan President John Kuan (關中) recently said that while the financial crisis was, on the surface, the most pressing reason for pension reform, underlying demographic changes are also of serious concern. With the bankruptcy of government finances looming, it was “great” for a couple of retired teachers to have a combined monthly pension of NT$140,000 and plenty of time for themselves, but “the state cannot cope.”
He has a point. After all, many salaried people receive less and people who worked in the public sector, such as retired military personnel, teachers and civil servants, get average monthly pension payouts of NT$70,000.
Where else, Greece excluded, does this happen?
Elsewhere, retired civil servants typically get 70 percent of their salary level when they retire.
Civil servants worked hard to gain their qualifications, but that does not mean the state has the responsibility to maintain their life in the way they had become accustomed.
A monthly pension of NT$70,000 is out of touch with social and economic realities. Are public sector workers really worthy of special treatment? Can the private sector rely on legislation guaranteeing these pensions at this level? The government is being very generous with taxpayers’ cash. Unless something changes, sooner or later the cupboard will be bare.
I would suggest a further reduction in the income replacement rate and the 18 percent preferential interest rate, or perhaps just canceling the 18 percent rate altogether for those on a monthly pension of more than NT$50,000.
Otherwise, if the government does not find a way to stem the outflow soon, we will be having our own financial crisis.
New Taipei City