Lawmakers yesterday blasted the Ministry of Civil Service over what they said was its mismanagement of the Public Service Pension Fund (PSPF), which is NT$28.4 billion (US$972 million) in the red.
The fund has had an annual average loss of NT$7.35 billion and an investment return rate of minus-1.3 percent since President Ma Ying-jeou (馬英九) took office in 2008, Democratic Progressive Party (DPP) Legislator Pan Men-an (潘孟安) said.
The Ministry of Civil Service is responsible for managing the fund, which includes pension programs for three groups of civil servants, education workers and military personnel, in total about 630,000 people.
The PSPF programs for civil servants and education workers are reportedly in danger of running out of funds as early as 2017, while the military personnel pension program could go bankrupt in 2019.
While the government often blames the global economic slowdown, Pan said the average rate of profit for Yale University’s fund is 11.28 percent and the California Public Employee Retirement System has generated an average rate of return of 6.25 percent over the past 10 years.
Pan blasted Minister of Civil Service Chang Che-shen (張哲琛) for what he said was his poor management of the fund, and for paying an annual management fee of NT$387 million to investment companies.
Ironically, Chang, who worked as the director of the Chinese Nationalist Party’s (KMT) Administration Committee, the party’s chief financial executive, had worked wonders for the KMT’s assets since he assumed his current position in 2008, Taiwan Solidarity Union (TSU) Legislator Lin Shih-chia (林世嘉) said.
The KMT made a profit of NT$1.79 billion from stock dividends between 2005 and 2007, but stock market profits have increased five-fold since the KMT returned to power, the party making NT8.39 billion between 2008 and last year, Lin said.
“As Chang was able to make a profit as a KMT executive and saw the party make even more money after 2008 when he served as a government official, then he should probably explain why the PSPF has suffered tremendous losses during the same period,” Lin said.
Before the meeting in the legislature, Chang said critics of the various benefits granted to people on government payrolls and their retirement bonus were “green with envy.”
The system came into existence in the 1950s and 1960s when most civil servants were paid relatively low salaries. The government encouraged retired civil servants to place money in deposits to boost their finances, and banks at the time offered very high interest rates to depositors, he said.
As the situation has now changed, the government is considering making adjustments to the system to address concerns, Chang said.
The issue should not become a source of contention between ordinary people and public servants, Chang said, adding that people should not “vilify civil servants” because it could deter people from choosing to work in the public sector.
During the question-and answer session, People First Party Legislator Lin Cheng-er (林正二) asked Chang to explain why he said critics were “green with envy.”
Chang initially denied making the remark, then said it was “a slip of the tongue.”
In the afternoon, Chang once again tried to clear the matter up, saying: “I didn’t mean to say that.”
“The overall economic environment and the demographic structure of the country when the retirement system was established were different from now. We are reviewing how to revise the systems,” Chang said.