Sun, Jul 01, 2018 - Page 1 News List

New Regulations: Divisive pension cuts take effect, to affect 333,000

Staff writer, with CNA

Chinese Nationalist Party (KMT) Chairman Wu Den-yih, center, participates in a meeting of the Republic of China 800 Heroes Association for the Protection of China in New Taipei City yesterday.

Photo: Weng Yu-huang, Taipei Times

Pension reforms involving retired civil servants, public-school teachers and military officers are to take effect today, and are expected to affect 333,000 people.

Government agencies have been inundated with appeals and requests for constitutional interpretations for pension cuts to be scrapped.

The deductions are to be implemented under amendments that were passed in June last year to the Act Governing Civil Servants’ Retirement, Discharge and Pensions (公務人員退休資遣撫卹法) and the Act Governing Retirement, Severance and Bereavement Compensation for the Teaching and Other Staff Members of Public Schools (公立學校教職員退休資遣撫卹條例).

Amendments to the Act of Military Service for Officers and Noncommissioned Officers of the Armed Forces (陸海空軍軍官士官服役條例), which cleared the legislative floor last month, are to also come into effect.

The pension floor for retired civil servants and public-school teachers is NT$32,160, according to the amendments.

The controversial 18 percent preferential interest rate for savings accounts of civil servants and public-school teachers hired before July 1995 is to be reduced to 12 percent this month and gradually phased out over 30 months.

As for retirees who claimed their pension as a lump sum payment, the interest rate is to be reduced to 12 percent this month and to 6 percent by 2025.

The income replacement ratio for people who worked for at least 15 years is to be reduced from 45 to 30 percent over 10 years, while those who worked for at least 35 years are to see the ratio reduced from 75 to 60 percent during the period.

The pension floor is NT$38,990 for retired military officials.

Military officers hired before July 1995 who had claimed their pension as a lump-sum payment are to see the preferential interest rate reduced to 6 percent by 2025, while those who receive monthly pensions payments are to see the interest rate eliminated in 10 years.

About 400 military officers who became disabled in the line of duty and those who are 85 or older would keep the 18 percent interest rate.

The pension reductions would affect 63,000 of 208,000 retired military officers, Veterans Affairs Council data showed.

The cuts would affect about 130,000 retired civil servants and 140,000 retired public-school teachers, Ministry of Civil Service and Ministry of Education data showed.

The two ministries and the Ministry of National Defense last month sent notices to retirees informing them of the pension cuts, prompting many to file appeals and requests for constitutional interpretations in a bid to have the amendments overturned.

New Taipei City Government Department of Education said it received 3,500 appeals between June 15 and Thursday from 14,680 teachers who have retired over the past year.

Chinese Nationalist Party (KMT) chapters have been providing legal counsel to retired military personnel who are seeking legal remedies, while a coalition of teacher groups is working with lawyers to apply for a constitutional interpretation.

While time-consuming, appeals, administrative lawsuits and constitutional interpretations are the only legal channels that could undo the pension cuts, National Federation of Teachers’ Unions president Chang Hsu-cheng (張旭政) said.

The federation would focus on requesting a constitutional interpretation, as one favorable interpretation by the Council of Grand Justices would repeal the pension cuts for all three groups of public employees, Chang said.

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