Premier Sean Chen today reiterated President Ma Ying-jeou's directive that all ministry/commission heads and their deputies should gain a full understanding of the nation's pension systems, and that agencies must be able to explain the reform to workers in both public and private sectors.
Chen gave the instructions at a Cabinet meeting during which the Council for Economic Planning and Development reported on the reform of pension systems. The premier asked the Directorate-General of Personnel Administration (DGPA) to organize the necessary training for government employees. The Executive Yuan's pension reform task force office will provide the technical knowledge to personnel offices, whereupon the information will be spread among government employees, and then to the general public. Agency heads and deputies will be the first to receive such training.
Reform of the various pension schemes must be tackled head-on, remarked Premier Chen. The Labor Insurance Fund cannot be fairly compared with retirement funds for civil servants, military personnel and public teachers, but both systems now face the same quandary because neither was designed fully in line with actuarial assessments. And since Taiwan has one of the fastest aging populations in the world, the financial security of its pension funds deserves urgent attention.
The issue must be dealt with sooner rather than later, Chen said. "It is a responsibility we cannot shirk."
The premier noted that many countries began enacting pension reform in the late-1980's. Taiwan is off to a relatively late start so the changes can no longer be delayed. Only by making the system sustainable can Taiwan ensure a hopeful future, he added.
Premier Chen thanked Vice Premier Jiang Yi-huah and other agencies for working with the pension reform office in coming up with the proposal. But it is only a proposal at this point and the dialogue with the public will certainly continue. The DGPA will make preparations for this second phase of communication.
Regarding severance payments for political appointees, the premier pointed out that the Statute Governing Retirement and Consolation Payments for Political Appointees limits this benefit only to those coming from the military, government agencies, schools and state-owned companies. Many appointees who leave their posts do not qualify. As for the preferential interest rate on deposit accounts, the only political appointees eligible are those who held their appointment for at least two years before January 2004. Hence, not many today can have this benefit.
Vice Premier Jiang added that President Ma's reform objective is to have a pension system that can be sustained for at least 30 more years—where private-sector workers, military personnel, civil servants and public teachers can receive payouts without having to worry for at least 30 years. This is significantly different from the Democratic Progressive Party's (DPP) plan of 20 years of sustainability, Jiang said.
Another notable difference between the DPP's and the Cabinet's plans is in the labor insurance premium ratios. Under the current scheme, employers contribute 70 percent to premiums, employees 20 percent and the government 10 percent. The DPP version would see employers pay 60 percent and employees 40 percent—doubling the burden on employees. Jiang said workers would have to pay more than NT$1,000 additional premiums each month, or a hefty NT$14,000 a year.