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 Government officials said at the time that the clause was “outdated” and no longer needed.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 Ministry of Transportation and Communications yesterday inaugurated the Danjiang Bridge across the Tamsui River in New Taipei City, saying that the structure would be an architectural icon and traffic artery for Taiwan. Feted as a major engineering achievement, the Danjiang Bridge is 920m long, 211m tall at the top of its pylon, and is the longest single-pylon asymmetric cable-stayed bridge in the world, the government’s Web site for the structure said. It was designed by late Iraqi-British architect Zaha Hadid. The structure, with a maximum deck of 70m, accommodates road and light rail traffic, and affords a 200m navigation channel for boats,
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest foundry service provider, yesterday said that global semiconductor revenue is projected to hit US$1.5 trillion in 2030, after the figure exceeds US$1 trillion this year, as artificial intelligence (AI) demand boosts consumption of token and compute power. “We are still at the beginning of the AI revolution, but we already see a significant impact across the whole semiconductor ecosystem,” TSMC deputy cochief operating officer Kevin Zhang (張曉強) said at the company’s annual technology symposium in Hsinchu City. “It is fair to say that in the past decade, smartphones and other mobile devices were
US-CHINA SUMMIT: MOFA welcomed US reassurance of no change in its Taiwan policy; Trump said he did not comment when Xi talked of opposing independence US President Donald Trump yesterday said he has not made a decision on whether to move forward with a major arms package for Taiwan after hearing concerns about it from Chinese President Xi Jinping (習近平). Trump’s comments on Taiwan came as he flew back to Washington after wrapping up critical talks in which both leaders said important progress was made in stabilizing US-China relations even as deep differences persist between the world’s two biggest powers on Iran and Taiwan. “I will make a determination,” Trump said, adding: “I’ll be making decisions. But, you know, I think the last thing we need right
TAIWAN ISSUE: US treasury secretary Scott Bessent said on the first day of meetings that ‘it wouldn’t be a US-China summit without the Taiwan issue coming up’ There were no surprises on the first day of the summit between US President Donald Trump and Chinese President Xi Jinping (習近平), the Mainland Affairs Council (MAC) said yesterday, as the government reiterated that cross-strait stability is crucial to the Asia-Pacific region, as well as the world. As the two presidents met for a highly anticipated summit yesterday, Chinese state media reported that Xi warned Trump that missteps regarding Taiwan could push their two countries into “conflict.” Trump arrived in China with accolades for his host, calling Xi a “great leader” and “friend,” and extending an invitation to visit the White House
RSS