Sun, May 14, 2017 - Page 3 News List

Private pension accounts should be allowed: group

By Abraham Gerber  /  Staff reporter

Members of the New System Teachers’ Alliance protest at the Legislative Yuan in Taipei yesterday, demanding that individual private pension accounts be established as part of pension reform.

Photo: Hsiao Yu-hsin, Taipei Times

Individual private pension accounts should be established as part of reforms, members of the New System Teachers’ Alliance said yesterday at a protest outside the Legislative Yuan.

Several dozen members of the group gathered for the protest, shouting slogans saying the government deceived young teachers.

“New system” refers to teachers who fall wholly under the pension system implemented after 1995, when reforms began denying new teachers eligibility to use “old system” preferential savings accounts.

“We want our right to control and manage our pension funds back,” said alliance founder Lee Man-li (李曼麗), a former National Federation of Education Unions official, calling for teachers to be allowed to choose whether their contributions are directed into a general pension fund or a personal account.

“The government is not really improving the pension system — its reforms would force younger people to pay more into a black hole, only to receive nothing when they retire after funds go bankrupt,” she said. “It would make more sense for us to take our contributions and put them into a bank account — at least we would be able to get them back.”

The government pays 65 percent of each teacher’s contributions to national pension funds, with the remainder deducted from their salaries. That percentage could be renegotiated as long as individual teachers are given control over their funds, she said.

Lee also criticized legislators for removing reform provisions which would have required that savings from eliminating “old system” preferential savings accounts be folded into the “new system” pension funds, saying that the government should be required to pay benefits to teachers based on the original formula for whatever contributions they have made to pension funds prior to reform.

“The government has been responsible for managing the fund prior to reform, so it should be responsible for making the promised payments under the original formula,” Taipei elementary-school teacher Wu Mei-wen (吳美文) said, adding that individual accounts differentiate their proposal from the National Federation of Teachers’ Unions’ call for a second account to be established within funds to hold new contributions.

“The government has already lost our trust with repeated broken promises — believing it once was innocence, but believing it twice would be stupidity,” she said.

National Federation of Teachers’ Unions president Chang Hsu-cheng (張旭政) said the union opposes individual accounts because they would increase teachers’ level of risk due to differing investment returns and the lack of guaranteed lifetime payments.

Higher contribution payments should be sufficient to guarantee teachers’ pensions as long as a new separate account with pension funds is established to receive them, he said.

Chen said that unrealistically low contribution payments — particularly in the early years following the new system’s establishment — are a major contributing factor to the impending bankruptcy, in addition to disappointing investment returns.

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