The legislature yesterday passed an amendment to the Act Governing the Recompense for the Discharge of Special Political Appointees (政務人員退職撫卹條例), which is to substantially cut monetary rewards for former presidents and vice presidents.
The bill says that the size of monetary rewards received by former presidents and vice presidents will not exceed NT$250,000 and NT$180,000 (US$8,214 and US$5,914) respectively stipulated in the Act of Courtesy for Former Presidents and Vice Presidents (卸任總統副總統禮遇條例).
The bill is known as the “Lien Chan clause,” taking its name from former vice president Lien Chan (連戰), the only living vice president who chose to receive a monetary reward, making his pension — which reportedly exceeds NT$260,000 per month — the highest among former vice presidents.
Photo: Wang Yi-sung, Taipei Times
A draft amendment to the Act of Courtesy for Former Presidents and Vice Presidents, which passed committee reviews in May, could further reduce their pensions. If it passes a third reading, it would impose a ceiling of NT$80,000 on the pensions of presidents and vice presidents.
A draft by Democratic Progressive Party Legislator Tuan Yi-kang (段宜康) that seeks to lower the income replacement ceilings of former ministers and senior political appointees to 40 percent and 60 percent respectively over 10 years was also passed yesterday.
The income replacement ceilings for former ministers is 55 percent, while the cap for senior political appointees is 75 percent.
Photo: Chien Jung-fong, Taipei Times
A draft by Tuan to conditionally phase out an 18 percent preferential interest rate for savings accounts of political appointees also passed a third reading.
As with civil servants and public-school teachers, the interest rate is to be phased out by the end of 2020 for former political appointees who chose to convert their pensions into monthly payments.
For retired political appointees who claimed their pensions in a lump sump, the interest rate is to be reduced to 6 percent in 2025, filling a gap between the income replacement ceiling and a “pension floor,” which was set at NT$32,160 per month.
Former lower-ranking political appointees whose pensions are less than NT$32,160 per month are to retain the preferential interest rate.
The interest rate amendment, set to take effect on July 1 next year, would affect 235 former political appointees, including 179 former ministers and 56 senior appointees, Ministry of Civil Service statistics showed.
Lien tops the list of political appointees in terms of pension payment size, the data showed.
In contrast to the tense atmosphere during reviews of bills to reform the pensions of civil servants and public-school teachers over the past two weeks, yesterday’s plenary session was relatively peaceful and proceeded smoothly, with few Chinese Nationalist Party (KMT) legislators making speeches to stall proceedings.
“This is a less controversial bill, so the KMT will allow swift passage without making too many comments,” KMT Legislator Tseng Ming-tsung (曾銘宗) said before the session.
After the amendment’s passage, Legislative Speaker Su Jia-chyuan (蘇嘉全) thanked lawmakers for conveying their opinions in a rational manner and accommodating opposite views.
He also thanked civil servants and public-school teachers for understanding that pension reform is aimed at ensuring the sustainability of the pension system, saying it would allow the nation to stride toward a better tomorrow.
Later in the afternoon, President Tsai Ing-wen (蔡英文) hailed the completion of reforms to the pensions of civil servants, public-school teachers and political appointees, saying the achievement proved that such reforms are not a “minefield” for the government or “a taboo that cannot be touched.”
“Finally, the pension system’s bankruptcy is no longer an urgent crisis for Taiwan,” Tsai said in a speech at the Presidential Office Building in Taipei.
While the legislation “cut the income replacement rate for public servants and public-school teachers, lowered or canceled the 18 percent preferential interest rate and extended the retirement age,” the measures are expected to save the nation’s coffers NT$1.4 trillion, Tsai said, adding that the extra funds could be used to “maintain the pension fund for civil servants and public-school teachers for at least one generation, approximately 30 years.”
Additional reporting by CNA
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