Thu, Jun 22, 2017 - Page 1 News List

DPP pushes 18% savings phase-out

By Chen Wei-han and Sean Lin  /  Staff reporters

Democratic Progressive Party (DPP) caucus whip Ker Chien-ming, left, and his Chinese Nationalist Party (KMT) counterpart Sufin Siluko yesterday speak at the legislature in Taipei before the second meeting of an extraordinary legislative session.

Photo: Fang Pin-chao, Taipei Times

To speed up pension reform, the Democratic Progressive Party (DPP) caucus yesterday reiterated its support for draft legislation proposing to phase out the 18 percent preferential savings rate given to retired civil servants in two years.

The Executive Yuan’s draft bill stipulates a six-year phase-out, while the New Power Party proposes a three-year phase-out. The DPP’s draft bill specifies a two-year period, which the caucus yesterday resolved to proceed with.

The caucus has also determined a “pension floor” of a monthly income of NT$32,160 for the preferential rate allowing those who receive less than this amount to retain the 18 percent rate.

Caucus members have not yet agreed on the pace of lowering the income replacement ratio — from 75 percent to 65 percent either in five years or 10 years — but aim to do so at a meeting tomorrow.

The caucus has yet to decide how much the government should pay for the pension premium of public-sector employees taking parental leave, although it has agreed that the period employees spend on parental leave can be counted toward their years of service.

The date of enforcement of the draft pension reform bills, although yet to be finalized, would likely be on July 1 next year.

DPP caucus whip Ker Chien-ming (柯建銘) accused the Chinese Nationalist Party (KMT) caucus of stalling the negotiations and delaying the legislation, while failing to reach an internal consensus over the review of the draft bills.

“[The KMT] is obstructing the review of pension reform bills with a lengthy [negotiation] process and using physical strategies [to disrupt] the review of the Forward-looking Infrastructure Development Program,” Ker said.

Meanwhile, legislators yesterday approved a proposal to lower the legal age at which Aboriginal public servants are allowed to receive pensions by five years, meaning they could start receiving pensions when they reach 50.

Current rules state that public servants must be at least 55 years old and have served for 30 years to qualify for retirement and pension.

KMT Legislator Sra Kacaw (鄭天財) initiated the motion, saying that given Aborigines’ shorter life expectancy, they should be allowed to receive pensions at an earlier age.

Statistics compiled by the Ministry of Civil Service show that there is a five-year difference between the average period over which civil servants of Aboriginal lineage and those of other ethnicity receive pensions, meaning that, regardless of their retirement age, Aborigines on average forgo five years worth of pension.

Aborigines on average retire at 55 and die at 66, while members of other ethnic groups on average retire at 60 and die at 77, the statistics showed.

Sra Kacaw’s proposal gained non-partisan support, with Legislative Speaker Su Jia-chuan (蘇嘉全) announcing that the proposal is to proceed to second reading.

Despite the progress, several key proposals, including how the bottom line for civil servants’ pensions should be set; how much the five-year time frame during which pensions are calculated should be extended by; and how civil servants on childcare leave and the government should split the allocation of monthly payment toward the pension fund in exchange for their seniority not being affected, remained in limbo.

Following an internal discussion, KMT caucus convener Sufin Siluko (廖國棟) said that setting the minimum pension payment at NT$32,160 would undermine the prevalent belief in Taiwan that as long as one works hard to pass qualification tests and ascend the ranks in public office, one would be able to have a good life.

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