Vice Premier Jiang Yi-huah said the government's objective in national pension reform is to come up with systems that are fiscally sound, pragmatic and stable, socially fair, and provides security to all generations. The reform plan will be ready within three months, remarked Jiang following a meeting today between President Ma Ying-jeou and the heads of the Executive, Legislative and Examination yuans to begin overhaul of the financially ailing systems.
Premier Sean Chen earlier tasked Jiang to lead a pension reform task force comprising officials from the Council for Economic Planning and Development, Directorate-General of Personnel Administration, Council of Labor Affairs, Ministry of National Defense, Ministry of Education, and Directorate-General of Budget, Accounting and Statistics. In addition to conducting a comprehensive review of the pension systems for military employees, civil servants, public school teachers and laborers, the Cabinet-level team is also working with the Examination Yuan to establish an inter-Yuan liaison system to hammer out reform issues.
At today's meeting, the task force proposed the government make changes in five focal areas:
- Income replacement rate – Adjust pension payout levels to reduce financial strains on the systems.
- Premium rates – Raise premium rates to reflect actual insurance costs.
- Payment eligibility – Reassess standards for calculating retirement age and payout levels.
- Fund utilization efficiency – Increase investment returns on insurance funds.
- Government responsibility – Take responsibility as guarantor of last resort for pensions.
Jiang also outlined the task force's major aims, which will be undertaken in two phases. In the first phase, the team will initiate reforms by reviewing proposals from government agencies, holding weekly meetings on designated topics, and coordinating reform plans with the Examination Yuan. Input will be gathered through discussion forums attended by experts, scholars and interest groups, while suggestions will be solicited from ruling and opposition political parties. And to make the process transparent, the task force will create a webpage to explain the current pension fund system and set up a phone number and email address where citizens can voice their opinions. At the conclusion of the first phase, preliminary reform plans will be announced to the public.
In the second phase, the dialogue for reform will extend to the broader public. In addition to holding a second round of expert forums and building pan-partisan support for the preliminary plans, the government will organize public meetings to hear suggestions from citizens. All of this feedback will be used to modify the plans, which will then be sent to government agencies to begin the legislation process.
The government is bound by duty to shore up the pension systems, Jiang said, adding that it will listen to all sectors and incorporate different opinions into the process. Because pensions are meant to guarantee economic security in old age, the government will devote every effort to ensuring the systems are sustainable.