Sat, Oct 20, 2012 - Page 1 News List

Premier pledges pension-system review

ABOUT-TURN:A year-end bonus for certain retired government employees that has sparked outrage this week is to be reviewed by the Cabinet, Premier Sean Chen said

By Shih Hsiu-chuan  /  Staff reporter

Democratic Progressive Party (DPP) caucus whip Ker Chien-ming, center, coordinates members of the DPP, the People First Party and the Taiwan Solidarity Union just before voting on a motion demanding the termination of year-end pension benefits for retired government employees during a plenary session in the legislature yesterday.

Photo: Liu Hsin-de, Taipei Times

In a turn of events, Premier Sean Chen (陳冲) yesterday pledged to conduct a thorough review of the system under which an estimated NT$20.2 billion (US$691.9 million) will be distributed next year to certain government employees as their year-end pension bonus.

“We will thoroughly review the system. The system came into being against the backdrop of history, with miscellaneous factors involved, leading to its complexity,” Chen said.

Chen said he has asked the Directorate-General of Personnel Administration (DGPA) to sort through all related historical archives for the Cabinet to make an overall review of the policy.

Democratic Progressive Party Legislator Kun Bi-ling (管碧玲) on Monday brought attention to the issue that the current 445,708 retirees from the military, the government sector, public schools and state-owned enterprises, who have opted to receive their retirement pension in monthly installments and not in one lump sum, receive a year-end pension benefit equivalent to 1.5 months of their pre-retirement salary — similar to the year-end bonus for civil servants.

The system has been in place since 1972.

With criticism of injustices within the social welfare system reaching a peak, highlighted by the government’s hesitance to guarantee pensions under the Labor Insurance Fund, which is heading for bankruptcy, the Cabinet appeared to have revised its position on the system.

On Wednesday, the DGPA issued a statement in which it said that the Cabinet was constitutionally and legally allowed to grant the bonuses because it was within its administrative discretion and that the benefit should remain unchanged because it has been a long-term practice and a necessity for retirees to live a stable life.

Chen yesterday denied that the Cabinet has attempted to appease critics with a proposal that would exclude wealthy people from claiming year-end pension benefits, as was reported by the Chinese-language United Daily News.

At the plenary session in the legislature yesterday, led by the Democratic Progressive Party (DPP), the People First Party and the Taiwan Solidarity Union jointly tabled a motion demanding termination of the year-end pension benefit for retirees.

They gave three reasons to support their argument. The benefit has lost its legal basis since Clause 2 of the rules for the implementation of the Civil Service Retirement Act’s (公務人員退休法) Article 26 was removed in 2010; the benefit is worsening the country’s already troubled financial position; and it will enforce a sense of relative deprivation among labor classes, the opposition parties said in a joint statement yesterday.

The proposal was blocked by the majority Chinese Nationalist Party (KMT) by one vote from being placed onto the plenary session’s agenda.

As a counteraction to address the issue, the KMT proposed another motion, in which it said that in consideration of the international economic situation, the country’s strapped financial situation and public views, the system should undergo a review.

The KMT’s proposal is to be deliberated on Tuesday.

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