Fri, Jul 18, 2014 page1

• Cabinet drops planned pension change

  PUBLIC SERVICE: A KMT lawmaker said that changing the pension payment interval from twice yearly to quarterly would only inconvenience elderly civil service retirees

  • By Shih Hsiu-chuan / Staff reporter
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  Amid criticism over a surprise policy flip-flop on the civil service payment system that would have seen the government save NT$383 million (US$12.73 million) a year in interest payments, Executive Yuan spokesperson Sun Lih-chuyn (孫立群) yesterday said it was his “fault” for not knowing that Premier Jiang Yi-huah (江宜樺) had called off the proposal to change the system.

  Sun’s acceptance of responsibility for the policy U-turn did not stop criticism that the government had put the brakes on the proposal to avoid upsetting the affected group — civil servants, public school teachers and military personnel, who are traditionally regarded as pan-blue supporters — in the run-up to the seven-in-one elections on Nov. 29.

  While pensions are supposed to be paid out on a monthly basis, under the current system, civil service retirees receive theirs twice a year — in January and July. The proposal would have changed the payment interval to a quarterly basis, with payments being given out in January, April, July and October starting next year.

  However, the Executive Yuan sent a text message to reporters at 9:52pm on Wednesday saying that the payment system is to remain unchanged.

  It came hours after Sun confirmed a report in the Chinese-language United Daily Evening News on Wednesday that the system was to be changed.

  Sun apologized again at a press conference yesterday, saying he did not know that the proposed change was overruled at a meeting presided over by Jiang at about the same time he was talking to reporters.

  “It’s all my fault,” Sun said, dismissing speculation that Jiang scrapped the proposal amid concern that it would displease traditional supporters of the Chinese Nationalist Party (KMT).

  Jiang decided that the payment system should stay the same “because tax collections are expected to increase as the economy continues its recovery trend,” thus making it less urgent to carry out the reform at the moment, Sun added.

  On Wednesday afternoon, Sun told reporters that the proposal to change the payment interval was made on March 28 by an Executive Yuan task force charged with fiscal reform.

  The task force also decided that pensions should be paid out every month starting in 2017 to reduce interest costs by an estimated NT$640 million per year, he said.

  Paying out pensions at shorter intervals enables the government to pay less in interest on loans it takes out to cover the retirement benefits and to gain more interest earnings, Sun said.

  The policy U-turn drew mixed reactions from lawmakers.

  “When the government knows that there are people opposed to the proposed policy and decides not to proceed with the plan... I would say it is a positive response to public opinion,” KMT Legislator Lin Yu-fang (林郁方) said.

  Lin said that the proposed change was wrong because increasing the payment interval would mean elderly retirees would have to make more trips to collect their pensions, which can be tiring, he said.

  “It would only inconvenience them,” he added.

  Democratic Progressive Party Legislator Huang Wei-cher (黃偉哲) said that the flip-flop again proved that President Ma Ying-jeou (馬英九) was incapable of advancing reforms when it comes to preferential treatment extended to retired and current public servants, public school teachers and military personnel, despite the burden it imposes on the nation’s finances and the social injustice.
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