To further improve and make sustainable Taiwan's pension systems for military retirees, public-school teachers and civil servants, and ensure that all citizens will be able to enjoy a worry-free retirement, the government established the Presidential Office Pension Reform Committee in June 2016. In the more than two years and 20 meetings since, the committee has held four regional pension reform congresses to gather a wider range of public opinion, and one national congress at the Office of the President, after which amendments to the law governing retirement, severance payments, and bereavement compensation for civil servants and the Act Governing Retirement, Severance, and Bereavement Compensation for the Teaching and Other Staff Members of Public Schools were passed by the Legislative Yuan at the end of June 2017. Amendments to the Act of Military Service for Officers and Noncommissioned Officers of the Armed Forces were likewise adopted on June 20, 2018. The pension-reform provisions of the laws took effect on July 1, 2018 for both military personnel and teachers and civil servants.
◆ Public-school teachers and civil servants
1. Retirement age: A new eligibility age of 65 years will be phased in over several years.
2. Benefits: Calculation standards will be revised in stages, while the income replacement ratio will decrease gradually over 10 years. Changes have also been made to the system of preferential interest rates on savings deposits.
3. Funding: Payroll contributions into the pension fund have been raised. All savings derived from lowered benefit payments and preferential interest rates will be injected back into pension system trust fund.
◆ Military personnel
1. Retirement age: Eligibility for pension benefits remains unchanged at 20 years of service.
2. Benefits: Standards for calculating monthly retirement income have been revised, with a floor for minimum monthly payments. Preferential interest rates on savings deposits have been reduced, while monthly retirement income in excess of that calculated by the new standards will decrease gradually over 10 years.
3. Funding: Payroll contributions have been increased. The government will transfer a total of NT$100 billion (US$3.29 billion) over the next 10 years to cover military pension fund deficits caused by the downsizing of the armed forces. All savings derived from lower benefit payments and preferential interest rates will be directed into the military pension system trust fund.