Wed, Jan 19, 2011 - Page 1 News List

Latest cap on preferential rate still not enough: DPP

TOO LITTLE:The changes could be pushed through by executive order by the Examination Yuan, but the DPP said a small number of retirees would be affected

By Vincent Y. Chao  /  Staff reporter

Democratic Progressive Party (DPP) politicians said yesterday that the government’s newest revisions to the “18 percent” savings account perk will do nothing to solve its underlying social and budgetary problems.

The government is set to introduce a NT$2 million (US$68,900) cap to accounts held by retired civil servants that are given 18 percent interest a year, which will affect retired senior officials and political appointees the most.

The changes, reached via a late-night consensus between the Presidential Office, the Executive Yuan and the Chinese Nationalist Party (KMT) on Monday, will not require legislative approval and could be implemented through an executive order by the Examination Yuan.

The DPP said the revision would only affect a minority of retired civil servants whose deposits currently exceed the cap and would not improve public perception of the entitlement program.

Most retired mid-level government workers face a deposit cap of between NT$700,000 and NT$1 million and would not be affected by the changes.


The measure was unsatisfactory and “not enough,” DPP Chairperson Tsai Ing-wen (蔡英文) said.

“The move is extremely limited and will not solve the root of the problem,” she said.

“It is not enough simply for the government to make this small gesture of appeasement. We will continue requesting that changes be implemented on a larger scale,” she said.

DPP spokesperson Tsai Chi-chang (蔡其昌) said the revision also failed to address a controversial clause that used to allow KMT members to count their years of service to the party in calculating their civil service record and entitlement to the 18 percent savings perk.

The Ministry of Civil Service should present a bill to the KMT and ask the party to return every dollar that has been paid so far, he said. It was wrong for the KMT to use national resources to subsidize its members, he said.


The DPP has proposed that the preferential interest rate be dramatically cut, possibly down to 5 percent or 6 percent, as part of a wider axing of public sector pensions.

The party said it would be more “reasonable” if the retirees only took home about 75 percent to 80 percent of their pre-retirement salaries, as opposed to the 95 percent that most enjoy now through bonuses and other perks, including the preferential savings account.

Such steps have the support of a majority of the public, the DPP said.

Echoing those concerns, several local DPP councilors said yesterday they had started a movement aimed at forcing local councils to stop paying for the subsidy program.

They are unhappy with additions to the interest payments passed by the legislature last year.

The amount of interest paid out grew by about 30 percent earlier this year for most mid-level retirees. The move partly rolled back an earlier belt-tightening measure by then-president Chen Shui-bian’s (陳水扁) administration in 2006.

“Local municipalities are footing the bill for the central government’s party,” said the group, which included city councilors from 10 cities and counties nationwide.

Wang Ding-yu (王定宇), a Greater Tainan City councilor who is the main backer of the movement, said that cash-strapped local governments would have to give a combined total of NT$3.4 billion more every year as part of the increases.

Documents provided by the councilors show that Taipei City would have to pay NT$560 million more annually, New Taipei City NT$400 million, Greater Taichung NT$280 million, Greater Tainan NT$400 million and Greater Kaohsiung about NT$500 million.

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