Wed, Mar 09, 2016 - Page 8 News List

The Liberty Times Editorial: Pension reform the pressing issue

There is one thing that, if the government were able to accomplish it, would ensure fairness and justice — including generational, occupational and transitional justice — which would revive the low public trust in politics.

What is this magic issue? Pension reform. All politicians understand this.

That such reform has been delayed is evidence of the enormous difficulty of the challenge, which has given pause to addressing the issues, because leaders are concerned about their place in history if they were to fail at the task.

Pension reform is difficult because it is a problem that has accumulated over a long time and because it involves people and their interests. The examples of failed attempts at pension reform in both the East and the West are too numerous to count.

With the establishment of the Pension Reform Task Force in 2009, President Ma Ying-jeou’s (馬英九) government launched pension reform and in 2013, the government proposed a draft bill to the legislature.

Ma called on the public to support the bill, saying that if the pension system was not reformed, the nation would live to regret it. However, the Chinese Nationalist Party (KMT) and its lawmakers hesitated because the party would lose either way: If the system was not reformed, the nation would go under, while if it was reformed, the party risked losing government power anyway.

In the end, after having lost public support, the party lost both the presidential and legislative elections in January in the biggest landslide defeat in the nation’s history.

The moral of the story? If a party does not implement pension system reform, it will not hold on to government power.

Pension reform was one of president-elect Tsai Ing-wen’s (蔡英文) campaign promises. She estimated that she would be able to put forward a solution within six months before holding a holding a national conference to build consensus behind a proposal, hoping to complete the process within about a year.

Following her inauguration on May 20, everyone will keep a close eye on the progress toward reform to test her government’s determination and ability to execute.

Because this is a tight schedule, the best and most pragmatic approach to creating an understanding for the need for reform, resolving opposition and getting the process moving to achieve quick results and address the most pressing issues would probably be to discuss the lessons from past failures and to set a series of staggered goals.

According to data from the Public Service Pension Fund Management Board, the pension fund for military personnel had a deficit of NT$3.9 billion (US$117.96 million at current exchange rates) in 2014, and it is estimated that it will go bankrupt in 2018.

The pension fund for public-school staff had a deficit of NT$400 million, and is expected to follow the military pension fund into bankruptcy by 2026.

The pension fund for civil servants is doing slightly better, but it might be bankrupt by 2029.

Not being able to collect one’s pension is no longer just a potential problem, it is a full-blown crisis. Military personnel, civil servants and public-school teachers will be the first to face this crisis, and they should all support pension reform to stabilize the finances of their own pension funds.

There is no longer any room for delaying such reform by reviling it as a “class struggle” or stubbornly continuing to resist it by talking about “legitimate expectations.”

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