Retired junior public servants will soon see a nice boost in their savings, as a law increasing the amount of money they can deposit into an 18 percent preferential interest rate account comes into effect this year.
The move, passed by the legislature last year, was criticized by Democratic Progressive Party (DPP) lawmakers yesterday as unfair and unnecessary as interest rates in public banks continue to hover below 2 percent, despite a 0.125 interest rate hike announced last week by the central bank.
At a press conference, DPP lawmakers said the “18 percent” clause first came into effect more than two decades ago when salaries in the public sector were lagging and the government was encouraging people to save.
The preferential interest rate was introduced in 1983 under the Chinese Nationalist Party (KMT) administration to take care of civil servants, soldiers and teachers as the three groups had low incomes prior to that.
The policy has long been the target of criticism, with many saying the preferential interest rate has caused a great burden on the nation’s finances and created social injustice.
“The conditions are very different now,” DPP Legislator Lee Chun-yee (李俊毅) said. “For the country to continue to [feed and clothe] public employees, we have to consider how the public will feel about this.”
Retired public servants under the ninth pay-grade level that entered the civil service before 1995 are expected to see their monthly checks increase by about NT$2,000, as the amount eligible for the special savings rate increases.
A public employee, for example, with NT$1.5 million (US$51,500) in retirement funds, would be able to deposit NT$100,000 more in the preferential savings account, netting an estimated NT$1,500 extra per month. The same deposit for a person without the preferential rates would generate less than NT$200 in a regular savings account.
Other public employees, depending on their pay grade, would see their additional deposit cap raised even more.
The revision is a rollback from the cuts instituted by former president Chen Shui-bian’s (陳水扁) administration, which, in a deeply unpopular move among public employees in 2006, drastically cut the program, saving the national coffers billions of NT dollars. Government officials said at the time that the clause was “outdated” and no longer needed.
The KMT-dominated legislature reinstated the perk last year during a boycott by DPP lawmakers who were upset over the Economic Cooperation Framework Agreement’s (ECFA) vetting process. Several opposition party lawmakers said they didn’t learn of the amendment to the Civil Servant Retirement Act (公務人員退休法) until it was too late.
“They snuck it through successfully,” DPP Legislator Pan Men-an (潘孟安) said. “Not only did they revise the cap, they also enshrined the [18 percent] into law, an action that should be condemned.”
DPP lawmakers said the revision was passed to drum up support from former public employees — estimated to number about 400,000 — prior to next year’s presidential election, an allegation the government denied yesterday.
Speaking in the legislature, Minister of Civil Service Chang Che-chen (張哲琛) said the revision was expected to save the national coffers about NT$100 million annually, because the amount of savings held by more senior retired public employees would be revised downward. Retired civil servants between pay grades 11 and 14 are expected to see a cut of about NT$6,000 a month, he said.
“Previously, the revision pioneered by the DPP administration fattened senior officials’ [bank accounts] at the expense of more junior workers,” he said.
What the KMT-passed revision did, he said, was a means to “readjust the balance.”
ADDITIONAL REPORTING BY FLORA WANG
The combined effect of the monsoon, the outer rim of Typhoon Fengshen and a low-pressure system is expected to bring significant rainfall this week to various parts of the nation, the Central Weather Administration (CWA) said. The heaviest rain is expected to occur today and tomorrow, with torrential rain expected in Keelung’s north coast, Yilan and the mountainous regions of Taipei and New Taipei City, the CWA said. Rivers could rise rapidly, and residents should stay away from riverbanks and avoid going to the mountains or engaging in water activities, it said. Scattered showers are expected today in central and
COOPERATION: Taiwan is aligning closely with US strategic objectives on various matters, including China’s rare earths restrictions, the Ministry of Foreign Affairs said Taiwan could deal with China’s tightened export controls on rare earth metals by turning to “urban mining,” a researcher said yesterday. Rare earth metals, which are used in semiconductors and other electronic components, could be recovered from industrial or electronic waste to reduce reliance on imports, National Cheng Kung University Department of Resources Engineering professor Lee Cheng-han (李政翰) said. Despite their name, rare earth elements are not actually rare — their abundance in the Earth’s crust is relatively high, but they are dispersed, making extraction and refining energy-intensive and environmentally damaging, he said, adding that many countries have opted to
CONCESSION: A Shin Kong official said that the firm was ‘willing to contribute’ to the nation, as the move would enable Nvidia Crop to build its headquarters in Taiwan Shin Kong Life Insurance Co (新光人壽) yesterday said it would relinquish land-use rights, or known as surface rights, for two plots in Taipei’s Beitou District (北投), paving the way for Nvidia Corp to expand its office footprint in Taiwan. The insurer said it made the decision “in the interest of the nation’s greater good” and would not seek compensation from taxpayers for potential future losses, calling the move a gesture to resolve a months-long impasse among the insurer, the Taipei City Government and the US chip giant. “The decision was made on the condition that the Taipei City Government reimburses the related
African swine fever was confirmed at a pig farm in Taichung, the Ministry of Agriculture said today, prompting a five-day nationwide ban on transporting and slaughtering pigs, and marking the loss of Taiwan’s status as the only Asian nation free of all three major swine diseases. The ministry held a news conference today confirming that the virus was detected at a farm in Wuci District (梧棲) yesterday evening. Authorities preemptively culled 195 pigs at the farm at about 3am and disinfected the entire site to prevent the disease from spreading, the ministry said. Authorities also set up a 3km-radius control zone
RSS