Thu, Jul 09, 2015 page8

• Pension system is discriminatory

  • By Lin Kien-tsu 林健次
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  One of the major reasons for the parlous state of Greece’s national finances is the excessively high pensions. However, this is something that everyone benefits from, and is also arguably a generational issue.

  Taiwan also has a problem with its pension system, but for a different reason. Salaried workers, the majority of whom are Taiwanese, receive a monthly pension of between NT$10,000 and NT$20,000. They are on a different system to retired state employees — military personnel, state school teachers and civil servants — among whom people from the post-war wave of immigration from China, known as waishengren, are disproportionately represented. The latter group can expect pensions of between NT$40,000 and NT$50,000, or perhaps NT$70,000, NT$80,000, NT$90,000 or even NT$100,000 for higher-ranking professionals.

  In addition, private companies each have their own pension regulations, and other factors such as dismissals, changing jobs and plant closures all mean that the majority of workers will not actually receive the full pension of between NT$10,000 and NT$20,000. The state of workers’ pensions and welfare is just one of the economic realities that people who are ruled, as opposed to those who rule, have to pay.

  In US dollar terms, the actual value of the pensions people in Taiwan take home is around double the nominal New Taiwan dollar value. Therefore, in terms of purchasing power, the pension and welfare of retired state employees in Taiwan is easily the most attractive compared with anywhere else in the world, but how is this?

  Within the public services in Taiwan, the cards have always been stacked to favor the waishengren non-Taiwanese post-war Chinese immigrants, whether or not this is written or tacitly understood, or whether it derives from social background or is codified in law.

  In the past, the national civil service examinations clearly and blatantly favored the waishengren, and the regulations have clearly specified that for every eight Taiwanese enrolled in the civil service, 940 waishengren were to be taken in. That is an enrollment rate of more than 100 waishengren to a single Taiwanese. This blatant prejudice was finally ended only in 1990.

  However, that does not mean that the actual prejudice and oppression ended there; It was just transferred to the pension system. The 1990s just so happened to be the time when the people who had come over to Taiwan with former president Chiang Kai-shek (蔣介石), and their children, were coming to retirement age en masse. It was even stipulated that only those who entered the civil service prior to 1995 would be eligible for the preferential 18 percent interest rate on savings.

  It is not hard to see how this prejudice and oppression had been translated over, because the vast majority of people who were able to take up high-ranking positions within the military, state schools and the civil service before 1995, within the biased legal context and the “old boy network” within the civil service of the time, were waishengren.

  It has been said that it was the influential officials within the Chinese Nationalist Party (KMT) writing the prejudice favoring the waishengren into the pensions and welfare system that is the main culprit behind the ethnic and inter-generational tensions that exist today.

  My own personal feeling is that if one group of people provide generous terms to another group, the two groups should really not be of the same ethnic group, for this way lies ethnic oppression. When the recipients of this generosity die, the wealth thereby accumulated will be passed on to their children, and so it is their descendants that will benefit.

  Meanwhile, it is the Taiwanese — who make up the majority of workers — and their children who emerge as the victims of this scenario.

  Until such time as there is some kind of equality between the pension systems for state employees and workers, no one can say that ethnic oppression does not exist in Taiwan.

  The Taiwan Independence Party (台灣獨立黨) has already listed this in its manifesto. Other parties should follow suit.

  Lin Kien-tsu is a former director of Tamkang University’s International Business Department.

  Translated by Paul Cooper
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