Vice Premier Jiang Yi-huah hosted the first expert forum on pension reform at the Executive Yuan building today. He stressed the government's resolve to improve the different systems so they are financially healthy enough to withstand demographic changes.
Jiang heard the Council for Economic Planning and Development (CEPD) report a plan it devised from numerous grassroots forums on the issue and asked experts and agency representatives to respond and offer their own recommendations.
"This pension reform should adapt to the country's changing demographics, so that the elderly can enjoy their twilight years, and the young can look forward to the future and not have to bear any burdens because of predecessors' poor planning," he said.
The Council of Labor Affairs (CLA) is responsible for the Labor Insurance Fund, while the pensions of civil servants, military servicemen and servicewomen, and teachers are under the purview of the Examination Yuan's Ministry of Civil Service (MCS) and the Executive Yuan's Ministry of National Defense (MND) and Ministry of Education (MOE), respectively, the vice premier noted in his opening remarks.
"These systems were established and have in the past been modified separately, but this year they are all being reformed together for the first time. This unprecedented situation adds complexity to the reforms and necessitates a great degree of cross-ministerial cooperation," Jiang said. He emphasized that the Executive Yuan began communication with the MCS's Public Service Pension Fund Reform task force immediately after establishing its own equivalent.
Over the past two months, 122 symposia have been held to gather public opinions on pension reform: 33 for workers, 38 for teachers, 28 for civil servants and 10 for the military, with current workers as well as retirees invited to attend. Local governments held 109 of the forums; 11 more were gatherings of academic experts organized by Cabinet-level agencies; the other two were co-hosted by the Examination Yuan and the Executive Yuan. The scale of each type of forum corresponded to the scope of the system under review.
The basis for these meetings, the vice premier said, is the concept of deliberative democracy: that is, the theory that gathering opinions in a bottom-up and outside-in fashion will help relevant government agencies understand the opinions of different sectors and reach a social consensus in a short period of time.
Interest in the discussions was unprecedented, with national and local legislators and office heads joining workers and representatives from trade and labor unions as well as industrial and commercial organizations at the meetings, Jiang reported.
"The government is listening to the concerns of laborers, soldiers, civil servants and teachers on every rung of the employment ladder as well as national and local public representatives," stated the vice premier.
Jiang requested that the CLA, CEPD, MOE, MND and Directorate-General of Personnel Administration separately visit members of relevant Legislative Yuan committees to hear their opinions on pension reform. "I ceaselessly listen to others' opinions there because I don't want any of them to slip through the cracks before we draw up the plan," he said.
In the future, the Executive Yuan will have to consult scholars and experts on subjects like how to improve the funds' financial planning and returns on investment, Jiang added.
Opinions and issues of concern to scholars and experts present at today's meeting are summarized as follows:
1. The most difficult and complex issues involve modifying the responsibilities and premium rates to be shouldered by different generations. Taiwan's low birthrate and aging population mandate major changes in this respect, as future generations could be overburdened as the working population shrinks and the retired population grows.
2. The systems' multi-tiered structures must be sound, especially the third tier, which is composed of private insurance plans. (The first tier is individual retirement accounts and the second is pension funds. The government plays a role in both.) Furthermore, the management efficiency and investment returns of the funds must be improved.
3. Given the rapidly aging population, Taiwan's labor market must be stimulated, as raising the labor participation rate will expand the funds' contributor bases, mitigating increases in their recipient rolls.
4. Labor, military, civil servant and teacher representatives advised the task force that information transparency is the most important aspect of the reform process. Furthermore, out of respect for the groups whose pension plans will be changed, there must be a clear transitional period before the changes take effect.
In his concluding remarks, the vice premier remarked that the members of the symposium, attended by representatives from different political parties and various associations, had shown great professionalism, rationality and objectivity.
Jiang said he has planned to develop pension reform in two stages ever since he was assigned to lead the Executive Yuan task force at the end of October. The first stage, collecting opinions and formulating the plan, is expected to conclude at the end of this month when Jiang reports to President Ma Ying-jeou. The second stage is extensive communications and publicity to explain the plan and the reasons for each policy to the public.
The government is responsible for formulating annuity systems acceptable to the whole citizenry, and it will adopt new policies that promise to improve on the status quo, the vice premier reiterated. He said the Executive Yuan will consider the Labor Pension Fund's circumstances are urgent, and the Public Service Pension Fund has been deliberating this issue for some time, it will manage the reform in a comprehensive, all-inclusive manner.
In response to scholars and experts' remarks that the participation of young people, especially those who have yet to enter the job market, has been insufficient to date, the vice premier stated that several more symposiums will be organized specifically targeting this demographic.
After Jiang reports the plan to Ma at the end of January, he will announce it to the public in conjunction with the Examination Yuan.