The government is to phase out the 18 percent preferential savings rate for retired public-sector employees over a period of six years, Vice President Chen Chien-jen (陳建仁) said yesterday.
In a radio interview, Chen said that the government plans to lower the 18 percent interest rate in stages over six years.
For people taking monthly retirement payments, the rate will be adjusted to 9 percent in the first two years after retirement, then to 6 percent in years three and four and 3 percent in years five and six. There would be no preferential interest rate after that, he said.
Photo: courtesy of Super FM98.5
However, to care for less-well-off retirees, the 18 percent preferential rate would remain for people below a salary floor, which is to be set at either NT$25,000 or NT$32,000 (US$791 or US$1,013) a month, pending further discussions, he said.
Pensioners who take a lump sum would be entitled to higher interest rates, Chen said, without specifying the rate.
The 18 percent preferential interest rate for retired military officials, civil servants and public-school teachers was introduced in 1960 when the average income for the three professions was lower than most other careers.
The government originally planned to scrap the preferential rate, but has decided to take a milder approach, Chen said.
“A pension [fund] is like a feeble goose, which has to lay eggs larger than it can handle every day. There will be no more eggs when it cannot stand anymore and dies,” Chen said. “However, a healthy goose that only has to lay normal-sized eggs can continue [to survive] and give birth to goslings.”
Under the pension system, the pension of a person who begins work at 25 and retires at 55 is only enough to cover 10 years of pension payments, Chen said.
By the age of 65, the person would be receiving pension payments covered by others’ contributions, he said.
With a retirement age of 50, due to the nation’s average life expectancy, women can expect to receive pension payments for 33 years and men for 27 years.
To ensure a sustainable pension system, the retirement age needs to be set at 55 and the income replacement ratio lowered from 80 percent to 60 percent, with the pension contributions of employees and the government raised from 12 percent to 18 percent, Chen said.
Meanwhile, amid accusations that the government has not been transparent in its organization of a national conference on pension reform, which is to be held on Sunday at the Presidential Office Building, Chen said the Presidential Office is always “fair and honest.”
Calling on opponents of the government’s pension reform plans to express their opinions at the conference peacefully, Chen said opponents have mobilized protesters in a “warlike fashion,” which is inappropriate conduct in a democratic society.
Although invited to attend the conference, the Chinese Nationalist Party (KMT), the New Party and the Taiwan Solidarity Union have yet to nominate representatives, Chen said, encouraging the parties to participate.
A signaling system malfunction disrupted high-speed rail (HSR) services beginning at 8am today, with trains temporarily reduced to three northbound and three southbound trains per hour as authorities conduct inspections. The malfunction occurred on a section of track in Miaoli County during pre-operation checks early this morning, forcing northbound and southbound trains to use a single track, the HSR operator said. The regular schedule has been replaced with three hourly trains offering only nonreserved seating in each direction, stopping at every station, it said, adding that business class cars would still have reserved seating. Departures from terminal stations are scheduled at the top
DRONE CENTRAL: Taiwan aims to become Asia’s democratic hub for drones, with most exports focused on high-quality military-grade models, an official said Taiwan’s drone industry is expected to expand significantly by 2030, producing 100,000 units per month and exporting half of them, the Ministry of Economic Affairs said yesterday. Current drone production capacity is about 15,000 units per month, but the industry can quickly scale up as demand increases, Industrial Development Administration Director-General Chiou Chyou-huey (邱求慧) told a news conference in Taipei. Taiwan’s drone output grew 2.5-fold last year to NT$12.9 billion (US$408.3 million) under a government program to develop the uncrewed vehicle sector, he said. The Executive Yuan in October last year approved plans to invest NT$44.2 billion into domestic production of uncrewed aerial
VERBOSE VESSELS: A CGA cutter and a China Coast Guard exchanged verbal barbs for more than a day in Taiwanese-controlled waters before the Chinese vessel left The Taiwanese and Chinese coast guards had a standoff near the strategically located Pratas Islands (Dongsha Islands, 東沙群島) in the north of the South China Sea, the Coast Guard Administration (CGA) said yesterday. The two sides engaged in intense radio exchanges over sovereignty claims during the 33-hour standoff. China Coast Guard vessel 3501 eventually left the restricted waters, 26.6 nautical miles (49.2km) west of the Pratas Islands, at 5pm yesterday, the CGA said. Lying approximately between southern Taiwan and Hong Kong, the Taiwan-controlled Pratas are seen by some security experts as vulnerable to Chinese attack due to their distance — more than
WARNING: China should stop engaging in actions that undermine regional peace and stability, as it would only build resentment among people across the Strait, the CGA said China has deployed more than 100 navy, coast guard and other vessels in waters from the Yellow Sea to the South China Sea and the western Pacific since US President Donald Trump and Chinese President Xi Jinping (習近平) met in Beijing, National Security Council Secretary-General Joseph Wu (吳釗燮) said yesterday. “In this part of the world, #China is the one & only PROBLEM wrecking the #StatusQuo & threatening regional peace & stability,” Wu wrote on X. In a separate post, he said Beijing was coercing Taiwan’s maritime domain, calling it illegal and provocative, after the Coast Guard Administration (CGA) expelled a
RSS