Pan-blue lawmakers yesterday called the government's plan to reform the civil service pension plan "politically motivated," coming as it does ahead of the year-end local government elections.
"The reform scheme, which is poorly-thought-out and an insult to all retired civil servants, is nothing but a campaign ploy," said Chinese Nationalist Party (KMT) Legislator Lai Shyh-bao (
Minister of the Civil Service Chu Wu-hsien (
The government watchdog asked the ministry to review and improve the 18 percent special interest rate given to civil servants, military personnel and teachers.
"The reform plan is aimed at making the scheme more reasonable, not for any political gain," Chu said.
He also shrugged off speculation that the preferential-rate scheme would be abolished altogether as another vote-getting idea.
Under the old pension plan, which was abolished in July 1995, some retired civil servants are paid more per month than their former colleagues who are still working.
Former vice president and KMT chairman Lien Chan (
Civil servants, soldiers and teachers who started work after July 1, 1995 are not eligible for the 18 percent interest rate. Those who retired after that date can only have the preferential rate applied to the savings from the number of years they worked before the cutoff date.
According to Chu, the state coffers had to pay more than NT$18.8 billion a year in preferential interest payments in 1995. The figure skyrocketed to more than NT$55.8 billion last year.
That is because while there were about 270,000 retirees who retired fully vested in the old scheme in 1995, the number of retirees who qualified all or in part for the preferential rate was more than 370,000 as of last December.
In a bid to make the pension plan more reasonable, Chu said his ministry wants to set a ceiling on the amount of monthly pensions plus interest earned under the 18 percent rate.
One proposal sets the cap for monthly payments at 90 percent of current civil service monthly salaries, another sets it at 80 percent and the third at 75 percent.
Chu said that the Examination Yuan has not yet decided on the proposals.
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