Minister of Finance Chang Sheng-ford (張盛和) said that after his wife retired from teaching junior-high school, “she makes more money than those who do work,” adding: “If we do not reform the pension system, it would be strange if the government did not default.”
Given that the government wants some of the nation’s citizens to enjoy an abundant lifestyle and generous post-retirement income-replacement rates, this year alone the government needs to allocate NT$141.8 billion (US$4.31 billion) to its employees — military personnel, civil servants and public school teachers. This is money taken from funds that would have otherwise been available to future generations.
According to a survey in the July issue of the Chinese-language Business Today weekly, 70 percent of public-sector employees would accept pension reform and more than half would agree to cuts in the current, extremely high, income-replacement rate. That means that most of them are willing to sacrifice their own generous benefits to promote social unity and sustainability.
Chang’s comments are not unique. President Ma Ying-jeou (馬英九) has said that “if the pension system is not reformed today, we will live to regret it,” while former Control Yuan president Wang Chien-shien, former Examination Yuan president John Kuan (關中) and former premier Sean Chen have said that pension reform is absolutely necessary.
It is clear that the most powerful politicians share the same view of the crisis and interpretation of what action is required, and that most public-sector employees are willing to make sacrifices and accept cuts. However, after all these years, coherent and just reform of the pension system remains a dream.
Retirement insurance and pensions create a social security net aimed at guaranteeing the economic security of the elderly. The goal is to provide retirees with fundamental guarantees and dignity, not to offer them a life of abundance.
For these reasons, pensions in most advanced countries offer an income-replacement rate of 60 to 70 percent. This is the direction Taiwan should be moving in, for both private-sector workers and public employees. As we move toward an aged society, care for the elderly should focus on long-term community care services that can provide retirees with real support.
Ma likes to talk about pension reform, but he has proven incapable of implementing it. He has consistently blamed the legislature for blocking pension reform, but since the Chinese Nationalist Party (KMT) has always held a legislative majority, it only serves to underline the meaning of the word “ineptness.” Given Ma’s inability to implement policy, it is not very surprising that his popularity is flagging amid constant public criticism.
Politicians should stop considering their own and their parties’ interests and use pension reform as a way of attracting voters from different social classes and professions.
The main reason that pension reforms struggle to get out of the starting gate is the government’s laziness and dysfunction, so politicians should stop manipulating the issue. The public should unite on pension reform and turn up the heat on the government and politicians to force the legislature, which is just about to start its next session, to come up with substantial changes ahead of the January presidential and legislative elections.
If they do not, voters should use their ballots to get rid of the legislators who fail to live up to public expectations. This is necessary to cut the excessive level of national debt, create a sustainable future for Taiwan, give our elderly a safe old age and relieve the financial burden on the generations to come.
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