On July 7, 2017, the day that pension reform began under then-president Tsai Ing-wen (蔡英文), Ketagalan Boulevard in Taipei was packed, as enraged military personnel, civil servants and teachers protested. However, actuaries at the Bureau of Labor Insurance quietly breathed sighs of relief, as the date that retirement funds were projected to go bankrupt had been delayed by at least eight years — from 2032 to sometime after 2040. The income replacement rate for retired public workers has since been reduced from 90 percent to 70 percent, while the labor insurance rate of 50 percent is expected to rise to about 60 percent by 2030. The reforms were not a cut, but a rescue of funds, fairness and the next generation.
The Chinese Nationalist Party (KMT) and the Taiwan People’s Party (TPP) are using their combined majority to push amendments to the Act Governing Civil Servants’ Retirement, Discharge and Pensions (公務人員退休資遣撫卹法) that would freeze income replacement rates and stipulate that if inflation rises 5 percent, pensions would automatically increase. The lawmakers who proposed the changes say that they would “restore dignity,” but actuaries warn it would be akin to planting a landmine. If passed, the amendments could increase expenditures by NT$300 billion to NT$500 billion (US$9.66 billion to US$16.11 billion) in one decade, reigniting the deficit woes. This is not only a budgetary issue, but intergenerational plunder.
Prior to Tsai’s reforms, some retired military personnel, civil servants and teachers received pensions that exceeded their salaries while they were in service, while ordinary workers received less than NT$20,000 per month from the Labor Pension Fund. After the reforms, retired public workers receive an average monthly pension of about NT$70,000, while labor pension payouts have been gradually increasing. Progress might be slow, but it is headed in the right direction. If the campaign to halt pension cuts succeeds, it would mean that political blocs have overruled expertise and ballots have torn apart consensus.
The opposition camp’s call to offset inflation is not completely wrong. Official data show that the consumer price index rose nearly 8 percent from 2022 to last year, and retirees have felt the financial impact. However, the solution should not be to unilaterally increase benefits for military personnel, civil servants and teachers — it should be a comprehensive adjustment. Labor pension recipients still get less than NT$18,000 per month on average. The government should establish a NT$30,000 minimum pension floor before proportionally compensating public-sector retirees — that would be true fairness. Otherwise, taking care of one generation would burden three. Who would pay for education, childcare and housing for young people?
Pension reform is about ending special privileges, not punishing public service. The contributions made by military personnel, civil servants and teachers deserve respect, but that respect should not be limitless. The core intent of pension reform should lie in ensuring that pensions are attainable, lasting and fair. Halting incremental pension cuts would not only create a fiscal crisis, but a moral one as well. It would send a message to young people: The taxes you pay are subsidizing the older generation, while your future is being traded by politicians in exchange for votes. When pension funds go bankrupt in the 2040s, who would take responsibility for the generation reaching retirement age then?
The Legislative Yuan should immediately release the latest actuarial report. Let the numbers speak for themselves and allow the public to decide. Only a society that dares to take responsibility for its future is truly worthy of being called a democracy.
Hsiao Hsi-huei is a freelance writer.
Translated by Kyra Gustavsen
Chinese state-owned companies COSCO Shipping Corporation and China Merchants have a 30 percent stake in Kaohsiung Port’s Kao Ming Container Terminal (Terminal No. 6) and COSCO leases Berths 65 and 66. It is extremely dangerous to allow Chinese companies or state-owned companies to operate critical infrastructure. Deterrence theorists are familiar with the concepts of deterrence “by punishment” and “by denial.” Deterrence by punishment threatens an aggressor with prohibitive costs (like retaliation or sanctions) that outweigh the benefits of their action, while deterrence by denial aims to make an attack so difficult that it becomes pointless. Elbridge Colby, currently serving as the Under
The Ministry of the Interior on Thursday last week said it ordered Internet service providers to block access to Chinese social media platform Xiaohongshu (小紅書, also known as RedNote in English) for a year, citing security risks and more than 1,700 alleged fraud cases on the platform since last year. The order took effect immediately, abruptly affecting more than 3 million users in Taiwan, and sparked discussions among politicians, online influencers and the public. The platform is often described as China’s version of Instagram or Pinterest, combining visual social media with e-commerce, and its users are predominantly young urban women,
Most Hong Kongers ignored the elections for its Legislative Council (LegCo) in 2021 and did so once again on Sunday. Unlike in 2021, moderate democrats who pledged their allegiance to Beijing were absent from the ballots this year. The electoral system overhaul is apparent revenge by Beijing for the democracy movement. On Sunday, the Hong Kong “patriots-only” election of the LegCo had a record-low turnout in the five geographical constituencies, with only 1.3 million people casting their ballots on the only seats that most Hong Kongers are eligible to vote for. Blank and invalid votes were up 50 percent from the previous
Japanese Prime Minister Sanae Takaichi lit a fuse the moment she declared that trouble for Taiwan means trouble for Japan. Beijing roared, Tokyo braced and like a plot twist nobody expected that early in the story, US President Donald Trump suddenly picked up the phone to talk to her. For a man who normally prefers to keep Asia guessing, the move itself was striking. What followed was even more intriguing. No one outside the room knows the exact phrasing, the tone or the diplomatic eyebrow raises exchanged, but the broad takeaway circulating among people familiar with the call was this: Trump did
RSS