The process toward reform of the pension system for public servants — military personnel, civil servants and public-school teachers — is in full swing, and relevant legislation is bound to be passed by the legislature.
This is not so much because the Democratic Progressive Party (DPP) holds a legislative majority, as it is due to the changing political value of the public servant vote.
In the past, pan-green voters were slightly outnumbered by the pan-blue camp, and support of the public servant minority was critical for the pan-blue camp to win elections.
The Chinese Nationalist Party (KMT) did not dare offend them, and as a result of his low approval ratings during his second term in office, former president Ma Ying-jeou (馬英九) was wary of touching the deeply troubled pension system.
Ma’s predecessor, former president Chen Shui-bian (陳水扁), also hesitated to move forward on this issue as he depended on the internal split in the pan-blue camp.
However, President Tsai Ing-wen’s (蔡英文) overwhelming victory over the KMT’s presidential candidate, New Taipei City Mayor Eric Chu (朱立倫), by more than 3 million votes in last year’s presidential election showed that the public servant vote is no longer key to winning an election.
When it comes to the pension issue, the public is no longer divided along pan-blue and pan-green lines, there are only those who oppose or support pension reform, regardless of political affiliation, and the opponents are in the minority.
This is why, especially when compared with the same-sex marriage issue, public servant pension reform is met with widespread approval. The DPP government is aware of this, so it is bound to push for its version of reform.
Even if public servants are calling for hundreds of thousands of people to take to the streets, it will be difficult for them to stop the momentum, particularly because there are divisions between working and retired public servants.
If the pension system is not changed, Taiwan could end up like Greece. Major political parties there relied on buying votes with policies, raising public servants’ benefits, and ended up with a mountain of debt.
Luckily for Greece, it has had the support of the EU and the IMF, while Taiwan is internationally isolated. If it defaults, the outcome would be a drastic depreciation of its currency and economic chaos that would affect all Taiwanese, not only public servants.
If that were to happen, the only choice might to be to look to China for help.
A majority of the public is displeased with the public servants’ pension system due to a feeling of relative deprivation caused by a comparison between that system and the pension systems of other professions. When compared with more advanced nations, this group is far too pampered.
According to an online analysis in the German weekly Focus in August last year, the monthly pension of a retired German judge with 40 years’ service and mandatory retirement at 65 years of age is 3,472 euros (US$2,448). After deducting taxes and insurance, it is less than 2,300 euros.
In Taiwan, the average retirement age of judges — which is voluntary — is about the same as in Germany, but average service duration is much shorter at 33.92 years. On top of their monthly pension, there is a “retirement payment” of NT$50,000 — to prevent corruption — so total payments reach NT$170,000 per month.
The quality of the judges in Germany is world-class and there are never any bribery scandals. Here in Taiwan, no one is surprised to read about a judge being convicted of corruption, and there are bound to be even more cases that go unreported. In addition, Taiwanese are aware that there are “dinosaur” judges who are completely out-of-touch with mainstream public sentiment.
Germany’s per capita national income is twice that of Taiwan, so Taiwanese judges are receiving the equivalent of four times the monthly pension that German judges receive. Taxpayers have a reasons to ask why.
Take a look at Japan for another example.
According to an article in a recent issue of Sankei Shimbun, average retirement pay for public servants is ¥21.67 million (US$190,708).
Despite Japan’s high living standards, the author of the article, considering Japan’s constantly rising national debt, accused public servants of being “fat cats.”
Their Taiwanese counterparts could receive tens of millions of New Taiwan dollars if they receive a monthly pension or enjoy the 18 percent preferential interest rate on savings for military personnel, civil servants and public-school teachers. Why?
The KMT’s situation today is not only embarrassing, it is dangerous.
As an opposition party, it must oppose the DPP. However, lending lopsided support to public servants — or even promising to restore the generous pension scheme if it returns to power — will only end in the KMT becoming a party for public servants and that will be the end of it.
Huang Juei-min is a professor in the Department of Law at Providence University.
Translated by Lin Lee-kai
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