Mon, Jul 11, 2016 - Page 6 News List

Pension reform has no time for failed talks

By Li Chuan-hsin 李川信

On June 23, the National Committee on Pension Reform convened for the first time. Addressing the committee, President Tsai Ing-wen (蔡英文) revealed four principles of the government’s reform program.

First, the pension system must be designed so that it is financially stable while taking into account the ability to pay into the system.

Second, using reasonable contribution levels, the system must look after the economic needs of disadvantaged groups.

Third, it must reduce discrepancies between the pension systems for different professions and occupations to build a more cohesive society.

Fourth, the reform process must be transparent and democratic.

Tsai said that the goal of these principles is to ensure that the reform process would construct a stable and sustainable pension system that would become part of the social safety net and help create a more unified society.

Following Tsai’s speech, the committee convened for the first time. Unfortunately, boisterous questioning by some committee members turned the meeting into a shouting match, resulting in three members leaving the meeting.

If committee members are unable to reach a consensus, how can they move on to the second stage of the process — the national conference on pension reform — let alone draft legislation? Will Tsai’s administration really be able to complete the reform process within one year?

Compared with Japan, the US and some European nations, pension reform in Taiwan is already two decades late. Although former president Chen Shui-bian’s (陳水扁) administration reformed part of the system — the 18 percent preferential savings interest rate and income replacement ratio given to military personnel, civil servants and public-school teachers — and former president Ma Ying-jeou (馬英九) abolished government employees’ year-end compensatory payouts, neither government was able to face up to the challenge of a perfect storm of fast-depleting pension funds combined with a rapidly aging population.

Taiwan’s four largest pension funds are facing the threat of bankruptcy. If the pace of reform is not accelerated, the time might come when pensioners stop receiving payments. Unless the debt problem is transferred to the next generation, society could be thrown into turmoil, which would hand Taiwan’s enemies an opportunity to interfere. Hopefully, legislators can put the needs of the country and the public first, and for the sake of future generations, strain every sinew to complete pension reform.

Tsai has said that government employees are not targets, but partners and participants in the reform process. It is understandable that government employee representatives are eager to gain public support and make their opinions heard. Government employee representatives would hopefully propose an alternative version of the reform program that addresses the areas they believe are illogical or confusing.

The starting pistol has been fired on pension reform with the establishment of the committee. It is crucial that momentum is maintained, as reform moves from committee stage to legislative scrutiny and finally enactment into law. It is essential that the job is completed within one year.

If that fails, the resignation of the deputy convener and executive director of the committee, Lin Wan-i (林萬億), would be a trifling matter compared with the failure to implement the government’s long-term strategy.

This story has been viewed 3389 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top