The government is slated to revise the pension scheme for government retirees again after President Ma Ying-jeou (馬英九) issued a directive asking the Executive Yuan to re-address the much-criticized 18 percent interest rate program and prevent retired senior government employees from benefiting unfairly from the scheme.
“As the president has issued the directive, we will comply with his instruction” that the program “should meet with the public’s expectation for fairness and justice,” Minister of Civil Services Chang Che-chen (張哲琛) said yesterday.
Chang’s remarks came in the wake of an apparent disparity between Ma’s instruction and Chang’s comments.
On Tuesday night, Ma, who doubles as Chinese Nationalist Party (KMT) chairman, instructed the KMT to request that party legislators push legal revisions to the existing law to make the system more fair.
Around the same time, however, Chang, whose agency is in charge of the 18 percent interest rate program, was seen speaking in a TV interview that night, saying that it would not require legal revisions to fix the issue.
Under the current depositary system, which was revised in 1995, civil servants who choose to receive retirement payments in monthly installments as opposed to a lump sum can earn interest of 18 percent on their pensions accrued from their years of service prior to 1995.
Since the system was implemented in 1983, the government has budgeted money for the program when the deposit rate in banks is lower than the guaranteed 18 percent interest rate. It was estimated that the government has paid NT$70 billion (US$2.4 billion) annually, while most banks presently offer only slightly more than 1 percent for time deposits.
The guaranteed interest rate remained in place until the then-Democratic Progressive Party (DPP) government in 2006 revised the program by slashing the maximum savings deposits eligible for the 18 percent interest payment.
In July last year, KMT lawmakers pushed through Examination Yuan-initiated amendments in the legislature that allow retired civil servants to deposit more money into their preferential rate accounts starting this year. The amendment came into effect this month.
Despite a mounting public outcry against the July proposal, government officials have insisted the move was aimed at rectifying the situation caused by the previous DPP administration, whose proposal the Ma government said favored high-ranking officials, while cutting the benefits of those with lower salaries and who had long years of service.
Chang on Tuesday said former vice presidents Lien Chan (連戰) and Li Yuan-zu (李元簇) were the “only two” cases in which retired high-ranking officials would receive more interest payments as a result of the July proposal.
Modifying his remarks yesterday, Chang said that in general, high-ranking officials would receive smaller pension amounts under the July proposal than the DPP scheme.
“The cases [of Lien and Li] were exceptions as we did not consider things in all aspects then, but we will work with the KMT caucus to fix it,” he said.
Chang, however, did not provide details on clauses that could be introduced to the program to prevent wealthy civil servants from benefiting from the hefty interest rates as Ma has suggested.
Neither did Premier Wu Den-yih (吳敦義) give a definition of “wealthy civil servants” yesterday, saying only that the issue is being deliberated by the Ministry of Civil Servants and the KMT.
At a separate setting yesterday, Presidential Office spokesman Lo Chih-chiang (羅智強) said Ma realized many were unhappy with the scheme mapped out in July and that was why he instructed government agencies to improve it soon after the law came into force.
“We cannot turn a deaf ear to people’s complaints,” Lo said, adding that government agencies must conduct a thorough review of related laws and regulations and amend the system to make it fairer and more just.
Presiding over the KMT’s Central Standing Committee yesterday afternoon in his capacity as the KMT chairman, Ma blamed the previous DPP administration for sparking controversy by revising the policy and presenting an amendment that favored senior officials, while cutting the benefits of those on lower salaries and those who had long years of service.
“This time we must present an amendment that will no longer favor top-level officials. Our goal is to make the policy meet public expectations for fairness and justice, and we will amend the law and revise regulations to reach the goal,” Ma said at KMT headquarters.
While promising to take public perceptions into consideration when revising the policy, Ma defended the reputation of civil servants and urged politicians not to manipulate the issue and create confrontations for political purposes.
“The [18 percent preferential interest rate for civil servants] is a public policy that can be discussed. However, some politicians manipulate the issue and stigmatize all civil servants. As the president, I cannot indulge such a situation,” he said.
KMT Legislator Hsu Shu-po (許舒博) supported the president’s call, saying that amending the interest rate would help achieve social justice.
KMT Legislator Lu Hsueh-chang (呂學樟), however, questioned the need to exclude the wealthy from the benefit, saying the interest rate is not a form of social welfare.
DPP Chairperson Tsai Ing-wen (蔡英文), meanwhile, said that any changes to the preferential savings rate system should be carried out rapidly, because of the government’s declining finances.
In a statement, she said the previous DPP administration had already noticed at the time that the amount of subsidies given to civil servants were overly high compared with those enjoyed by the general public.
“We do think that this is an issue worth addressing,” she said.
She advised that at the same time, the government needed to take into account society’s feelings on the issue. It was time, she suggested, that the subsidies be cut and the system made “more reasonable.”
“The reform of the preferential savings rate should aim to no longer pit civil servants and the wider public against each other,” she said.
ADDITIONAL REPORTING BY FLORA WANG, VINCENT Y. CHAO AND CNA
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