Unfunded liabilities of the pension system for military personnel, public-school teachers and civil servants are estimated at NT$8.137 trillion (US$$251.9 billion), while the government allocates about NT$310 billion per year to the groups, or about NT$850 million per day, reports by the Directorate-General of Budget, Accounting and Statistics (DGBAS) and the Ministry of Finance said.
The DGBAS and the ministry briefed a meeting of the National Pension Reform Committee on Thursday regarding the nation’s financial status.
The agencies said that of the NT$310 million allocated this year for military personnel, civil servants and public-school teachers, NT$77.8 billion is to cover the 18 percent preferential interest rate on savings held by those who began their service before 1995.
With labor insurance, national pensions, farmers’ health insurance and debt local governments have accumulated to cover the National Health Insurance System, the central government has about NT$17.749 trillion in unfunded liabilities, the agencies said.
National Chengchi University law professor Kuo Ming-cheng (郭明政) said that the central government sees the debt increase by NT$200 billion per year, which is almost like borrowing money to pay the pensions.
Compared with the financial predicament of the group’s pension program, the labor retirement pension program receives NT$200 billion per year, while labor insurance takes in NT$300 billion and pays out NT$200 billion per year. In other words, the labor insurance program has a balance of NT$300 billion a year, which is of great help to the country’s finance, Kuo said.
Military personnel, civil servants and teachers’ representatives at the meeting said blame over financial arrears was misplaced.
National Civil Servant Association president Harry Lee (李來希) said that whenever the government gets mired in financial troubles, it is the civil servants, military personnel and teachers which are blamed.
“Why not raise the debt ceiling?” Lee asked, adding that the government should deal with issues of financial discipline and low taxation.
Lee said that the idea of “unfunded liability” the DGBAS raised has been repeatedly quoted and has since stigmatized the group.
Taoyuan Education Union chairperson Peng Ju-yu (彭如玉) said pensions for the group are “delayed salaries” that the state as an employer pays its employees.
What needs to be investigated is why the boss has not been making money, Peng said, adding that it is unfair to blame the “employees.”
National Taiwan University professor of social work Fu Tsung-hsi (傅從喜) said that even if the term “unfunded liability” was not used, it would be “the government’s responsibility to pay.”
Paying NT$300 billion per year for pensions, even without the unfunded liabilities, is sufficient reason to reform the system, Fu said.
Minister without Portfolio Lin Wan-i (林萬億), who is the deputy convener and executive director of the committee, said a pension reform meeting next week would discuss possible reforms to the civil servants’ pension system.
The Ministry of Civil Service will present a report on the insurance and pension system of civil servants at the meeting, Lin said.
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