Mon, May 23, 2016 page3

• Study highlights pension system issues

  REFORM REQUIRED: President Tsai said in her inaugural address that the pension system could go bankrupt unless reformed, but a previous try hurt the KMT at the polls

  • By Tseng Wei-chen and Jonathan Chin / Staff reporter, with staff writer
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  A study conducted by the Ministry of Civil Service suggested that 42 percent of the nation’s retired civil servants, or 56,773 people, claim more than NT$60,000 per person per month in pensions and benefits, a sum that is almost three times the nation’s minimum wage.

  The study found the average monthly pension for the nation’s 13,4849 retired and claiming public servants, including the 18 percent rate paid on special savings accounts and monthly pension payments, is NT$50,000 per person per month, which is also the median sum.

  In her inaugural address on Friday, President Tsai Ing-wen (蔡英文) issued a warning about the pension system and the need for urgent reforms to it.

  “The pension system will go bankrupt without reform,” she said.

  According to the study, 646 retired civil servants receive more than NT$100,000 every month, while 8,292 receive between NT$80,000 and NT$100,000.

  An additional 47,835 retirees receive monthly payments of between NT$60,000 and NT$80,000.

  Eighty-four percent of retired public servants, or 113,180 people, claim more than NT$40,000 per month, the study said.

  An unnamed ministry official said that those estimates do not include retired veterans, public-school teachers and people who retired from state-owned enterprises, adding that while soldiers and teachers do not tend to claim higher pensions than public servants, they do tend to retire after fewer years in service.

  An unnamed Democratic Progressive Party (DPP) legislator said: “The administration is cognizant of the enormity of the task of pension reform, particularly with regard to the military, public servant and teachers sector.”

  For example, the Chinese Nationalist Party (KMT) said that a backlash over the omission of year-end bonuses in 2013 to public-sector retirees was the “primary cause” of its electoral defeat in 2014, the lawmaker said, adding that the then-KMT government deleted the item in response to pressure from DPP Legislator Kuan Bi-ling (管碧玲) in 2012.

  Former Examination Yuan president John Kuan’s (關中) proposals to impose modest cuts on the special interest rates and income replacement ratio for pensions were poorly received by public sector employees and KMT legislators, the DPP legislator said.

  Quoting the Directorate-General of Budget, Accounting and Statistics, the lawmaker said the average monthly salary for the nation’s private sector working population is NT$36,500, with 38 percent of private employees making less than NT$30,000 per month and 68 percent making less than NT$40,000 a month.

  Four out of 10 retired civil servants receive monthly sums that are the equivalent of three times the nation’s minimum wage, while 80 percent of the retirees make more than 70 percent of the working population, the lawmaker said.

  “The current pension system is a complete contradiction of the basic guarantees for the standard of living for older citizens,” the lawmaker said.

  Reducing income replacement rates to a range from 60 percent to 70 percent would be insufficient to produce fair wages in public and private sectors, because high-ranking civil servants and military officers could still claim pensions of NT$60,000 to NT$70,000 per month on account of their higher salaries, the lawmaker said.
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