Wed, Apr 24, 2013 - Page 3 News List

Pension reform exploits private sector, DPP says

By Chris Wang  /  Staff reporter

New Frontier Foundation CEO Lin Wan-i, left, National Taipei University finance professor Huang Shih-hsin, second left, Democratic Progressive Party (DPP) Chairman Su Tseng-chang, third left and DPP Legislator Lee Chun-yi take part in a forum on pension reform yesterday in Taipei.

Photo: Chien Jung-fong, Taipei Times

President Ma Ying-jeou’s (馬英九) administration should not “exploit” private-sector workers’ retirement benefits before reforming civil servants’ pensions because occupational gaps are among the most important issues in the government’s pension reform plan, the Democratic Progressive Party (DPP) said yesterday.

“We support labor groups’ planned demonstration on Workers’ Day on May 1 to protest the Ma administration’s draft reform plan for the Labor Pension Fund and reiterate that reforming civil servants’ retirement benefits should be the priority,” DPP spokesperson Lin Chun-hsien (林俊憲) told a press conference.

The DPP said it was insisting on the point because civil servants’ retirement benefits had caused unfairness in society and created gaps between different occupations, Lin said.

A draft amendment of the Council of Labor Affairs’ Labor Insurance Fund proposed last week would be “an obvious exploitation of private-sector workers” because they would have to pay higher premium for lower retirement payment and would also receive the payment at a later age, he added.

A forum on pension reform organized by the DPP yesterday came up with similar conclusion.

While the primary spirit of pension reform — fairness and sustainability — are undeniable, participants said that the Ma administration had mistakenly prioritized the latter over the former.

The government’s current reform plan has failed to address the occupational gaps between civil servants and private-sector workers, which has been a major concern for most people, and has increased the payment gap between employees of different generations in the same sectors, DPP Legislator Lee Chun-yi (李俊俋) told the forum.

Private-sector workers oppose the government’s plan because it would make them incur higher losses than civil servants to help Ma’s efforts to address the financial sustainability of various pension programs, Lee said.

“Their income replacement rate and maximum insurance amount would still be far beneath those of civil servants’, which is unfair,” Lee said.

The government has until now focused on resolving financial sustainability of the programs as actuarial reports said those pension programs are facing bankruptcy in the near future, National Taipei University finance professor Huang Shih-hsin (黃世鑫) said.

“However, that was a wrong approach because those actuarial reports were incorrect in the first place. If you calculate them with a different formula, you’ll find that those programs are in pretty good shape,” Huang said.

“In other words, the government is ‘barking up the wrong tree’ when it makes finance — rather than fairness — the main issue,” Huang said.

“The fact is that both the insurance packages for civil servants and private-sector workers have been reduced and the gaps are still there,” he added.

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