Sat, Apr 15, 2017 - Page 1 News List

KMT caucus unveils pension plan

By Alison Hsiao  /  Staff reporter

The Chinese Nationalist Party (KMT) caucus yesterday put forward its pension reform proposal, which includes cutting retired public servants’ 18 percent preferential savings rate to zero in the seventh year.

The proposed cut is the same as the Examination Yuan’s version, but more drastic than a proposal made by the KMT’s National Policy Foundation think tank earlier in the week.

The legislature on Friday last week resolved to start reviewing pension proposals on Wednesday next week and agreed that the KMT caucus could put one forward any time before the reviews began.

KMT members have been debating whether the party should submit a plan.

KMT Chairwoman Hung Hsiu-chu (洪秀柱) on Sunday last week told a rally of retired military personnel — with participants stationed in shifts outside the Legislative Yuan in Taipei to protest pension reform — that the party “should not submit its own proposal, as the Democratic Progressive Party [DPP] commands [both the executive and legislative branches], so it should take all of the responsibility.”

Hung said that the DPP is “springing a trap,” seeking to have “the KMT endorse the DPP’s proposal, as what is likely to be passed is the DPP’s version.”

However, the KMT caucus apparently has a different take on reform, with KMT caucus convener Sufin Siluko (廖國棟) saying: “Party headquarters is taking into consideration only some people,” but the KMT should face “all people across the nation.”

While the National Policy Foundation recommended that the 18 percent preferential savings rate be cut to zero in 18 years, the caucus’ proposal calls for the preferential rate for retired public servants receiving monthly payments to be cut to zero in the seventh year, while those who received the pension in a lump sum would have the rate cut to 6 percent in the seventh year, which is no different from draft plans by the the Examination Yuan and the Presidential Office’s pension reform committee.

However, the caucus has an “exemption” clause for those aged 85 or older, with their preferential rate to remain unaffected.

Other public servants exempted from the cut are those with monthly pensions of less than NT$32,160, with the cutoff to be re-evaluated annually based on inflation.

The caucus would also allow a more lenient system to determine pension rates.

While the pension reform committee proposed that the average insured salary of the final 15 years of employment should be used to determine pensions and the Examination Yuan proposed the final 10 years, the KMT caucus’ proposal was five years.

As for the income replacement ratio, the KMT caucus’ proposal was the same as the Examination Yuan’s: To lower the ratio for public servants who have worked for at least 35 years from 80 to 70 percent in 10 years, while the committee’s plan is to lower the ratio from 75 percent by 1 percentage point each year until it reaches 60 percent.

The KMT caucus has not proposed reforms for military personnel or public-school teachers, while the party’s lawmakers have been asked to present draft labor pension reform proposals.

KMT Legislator Lin Wei-chou (林為洲), the convener of the caucus’ pension reform team, said he believes that its version is milder than that of the DPP.

The nation has to face these times of change together, Lin said.

In related news, the legislature yesterday passed a resolution proposed by the People First Party caucus requiring the Executive Yuan and the Examination Yuan to present in two weeks an actuarial report and evaluate the impact of all of the pension reform proposals.

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