With the imminent threat of bankruptcy, the government is trying to step up pension reform. There is a public consensus on the need to establish sustainable pension measures. However, the Examination Yuan appears to be blind to the need and more interested in maximizing pensions for people with vested interests, including its own members.
At a time when its legitimacy is being called into question, the Examination Yuan has turned its back on what the public expects of it, drafting amendments that promise to be of little benefit to addressing the looming collapse of the pensions system.
At issue are the changes it made to the version proposed by the Presidential Office’s Pension Reform Committee. The committee’s proposal was to base payments on the insured’s average salary over the final 15 years of employment; the Examination Yuan wants to reduce this to 10.
This difference will mean a significant increase in costs, because that extra five years just so happens to coincide with the transition of career civil servants from junior to senior rank, and a subsequent change in their professional grade. In the majority of cases, people will have reached the highest grade they can achieve by the time they retire.
If the pension calculation base is not extended further back, there will essentially be little variation in an individual’s income replacement rate, and it will be higher than that of workers in the private sector.
The Examination Yuan’s changes to the proposal would increase the income replacement rate of civil servants from 60 percent to 70 percent, with the rate for teachers tweaked to only 65 percent. The difference in the income replacement rate had teachers’ groups seeing red.
The Examination Yuan is evidently looking out for the interests of civil servants, among whom its own members are counted, and seems quite happy to sacrifice others in the process. To secure its own benefit, it is willing to hold off on meaningful reform for the time being, only for the public to go on the warpath for the next round just a few years down the road.
The members of the Examination Yuan secured their positions legitimately, having been nominated by the president and confirmed by the legislature. Nevertheless, legitimacy does not equate with being right. The majority of the current crop of members were nominated by former president Ma Ying-jeou (馬英九) and confirmed by a Chinese Nationalist Party (KMT)-controlled legislature. Since then, there has been a changing of the guard, and they have lost some of their legitimacy as a result.
It is part of the Examination Yuan’s duty to review the committee’s pension proposal, but with power comes responsibility. Instead, despite being fully aware of the power it wields, it has sought to retain benefits for civil servants, while disregarding social fairness and justice and the possibility of installing a sustainable financial plan.
By obstructing the pension reform process and pursuing its own vested interests, the Examination Yuan has only succeeded in confirming its own superfluity.
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