A few days ago, an amendment to the Civil Servant Retirement Act (公務人員退休法) passed its third legislative reading, changing the current “75 system” to an “85 system.” This means that, following a grace period of 10 years, after which the new legislation comes into effect, civil servants who have put in 25 years of service can claim their full pension when they reach the age of 60, or at age 55 after 30 years of service — 85.
In any other comparable country, this would be seen as a major event. Not so in Taiwan.
The public didn’t appear to find it too out of the ordinary — it only made the papers for one day — and the opposition party did not even feel obligated to comment.
Of course, the opposition Democratic Progressive Party (DPP) had the right to rail against the Economic Cooperation Framework Agreement. There are many obstacles in the way for cross-strait development in the future, but the history books will ultimately deliver the verdict on whether the agreement is really going to bring about the sacrifice of independence in Taiwan for closer ties to China.
The current cross-strait politico-economic situation is both precarious and fluid, but the DPP seems to be a bit of a one-trick pony: Its entire output could be summarized as “China = Bad.”
There are other issues to be concerned about, not least the one of soaring national debt, which is probably the more pressing issue at the moment. It is quite exasperating to see such indifference to the question of civil service pensions, considering how closely it is related to the problem.
It is not like this has not been looming for some time. The government assures us that we are only in the red to the tune of about NT$4 trillion (US$125 billion), but the actual figures are far higher if hidden liabilities are taken into account. According to last year’s figures, we are actually more than NT$13 trillion in arrears, exceeding the entire GDP of less than US$400 billion.
If you want to know how important an excessively high national debt is, you need look no further than Greece’s recent economic crisis.
If ever there was a time for the opposition to show us what they were made of, this would have been it, but they proved to be little more than a damp squib.
We didn’t even hear a peep out of them when Minister of Finance Lee Sush-der (李述德) made the rather audacious claim back in March that the nation’s finances were in the best shape of virtually any other country in the world.
You would think that after eight years in power, the DPP might have a better idea of the nature of the national debt.
As it stands, the current government, under the leadership of President Ma Ying-jeou (馬英九), is at this very moment trying to push amendments to the Public Debt Act (公債法) through the legislature that would increase the local government borrowing ceiling. This will surely encourage an expansion of the national debt.
However the opposition party is not performing its role as a check and balance to the government. Nobody is expecting the DPP to come out with its guns blazing on this issue, but at the very least we might want to see a bit of moral fortitude on its part in protecting the interests of the country and its citizens.
So what has the civil servant retirement system got to do with the problem of national debt, you may ask?
Well, that’s easy. Monthly pension payments for retired armed forces personnel, teachers and civil servants is one of the main culprits behind the soaring national debt.
Every year, the government pays out over NT$200 billion for these pensions. Who knows in what shape the state coffers will be after 10 years more years — the period before the new system comes into effect — of increasing numbers of personnel retiring as young as 50 or even 40 under the old “75 system.”
Overly generous civil service pensions were actually among the main contributory factors behind Greece’s debt crisis. Male civil servants were allowed to retire at 57, women at 52, and they would receive a pension corresponding to a full month’s salary at their pay level at the time of their retirement. The recent state bankruptcy forced them to pass a new law changing the retirement age to 65, which brings it into line with most other countries.
That being the case, will the Taiwanese-style “85 system,” in which civil servants can claim monthly pension payments corresponding to their full salary having retired at 55, or 60 at the very latest, solve the problem?
As the saying goes, nothing is certain but death and taxes. Six months ago, when you thought about Greece, you conjured up images of blue skies, fresh food and inviting oceans.
Who knows? Six months from now, could Taiwan have become a byword for financial crisis?
Nobody wants this to happen, but surely the ever-expanding monthly pension burden and the resulting national debt is keeping any politician worth their salt from sleeping at night.
I call on the elite of the DPP, a party that professes to love this country, to prove that they represent more than a one-trick pony, and come out fighting on more than just one issue.
Huang Juei-min is a law professor at Providence University.
TRANSLATED BY PAUL COOPER
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