Sat, Mar 24, 2018 - Page 3 News List

Tax-free retirement plan should be for all teachers: union

By Ann Maxon  /  Staff reporter

Private-school teachers and education group representatives yesterday called on the government to make all private-school teachers eligible for tax-free retirement savings plans.

The three-pillar pension system for faculty members of private elementary schools, junior and senior-high schools, colleges and universities was first introduced in 2010 and designed to ensure financial stability for retired educators at three different levels, National Federation of Teachers’ Unions president Chang Hsu-cheng (張旭政) said at a news conference in Taipei yesterday.

While pillar one is a defined benefit retirement plan funded by the state-run civil servant insurance scheme, pillar two is a defined contribution account to which both the school and teacher are required to contribute, he said.

Pillar three is a savings plan that allows teachers to contribute more of their own salaries into their defined contribution account, but the option is only available when their school agrees to contribute NT$1 per teacher per month, Chang said.

“The additional savings plan is well designed and essential to the effectiveness of the three-pillar pension system, but although the system has been in place for more than seven years, only one-third of private schools have utilized it,” he said.

This has affected many teachers’ right to a better life after retirement, he said.

“According to statistics from the Ministry of Education, assuming a teacher retired after working at a school for 30 years, every month they would receive NT$15,000 to NT$18,000 from their pillar one plan, and NT$15,000 to NT$16,000 from pillar two, with a monthly total of a little over NT$30,000,” Chang said.

“An additional savings plan would allow them to receive NT$6,000 to NT$10,000 more every month, which would be a huge help,” he added.

“On average, NT$50,000 of the pillar three savings account is tax-free, which means teachers on the savings plan can save up to NT5,000 to NT6,000 in tax every month,” Jinwen University of Science and Technology assistant professor Hung Ching-chih (洪清池) said.

Teachers and education groups called on the ministry to take measures to solve the issue and urged legislators to amend the Act Governing the Retirement, Bereavement Compensation, Discharge with Severance Pay Benefits for the Teaching and Other Staff of School Legal Persons and their Respective Private Schools (學校法人及其所屬私立學校教職員退休撫卹離職資遣條例) by dropping the rule that allows schools to control whether teachers can utilize the tax-free retirement savings plan.

Chinese Nationalist Party (KMT) Legislator Apollo Chen (陳學聖), who attended the news conference, promised to propose an amendment soon.

“The reason many schools have not executed the pillar three savings plan is because they are unwilling to, not because they are unable to, and so far the ones that are already using it have not experienced any financial difficulties at all,” he said.

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