7/30/2019 2013.04.Open Studio1 Confronting Pension Reform
1/3
2013 Open Studio Series
Confronting Pension Reform
Posted April 23, 2013
The Democratic Progressive Party (DPP) held the first of its 2013 Open StudioSeries, which are policy forums discussing a wide range of topics concerning
domestic politics and foreign relations. The April 23rd symposium, Confronting
Pension Reform, examined the issue of reforming retirement benefits of civil
servants with reviews and discussion on the impact of the Examination Yuans recent
draft bill on civil service pension reform. Professor Lin Wan-yi, executive director of
the DPPs think tank, presided over the forum. Invited guest speakers included:
Professor Emeritus Huang Shin-hsin, of National Taipei Universitys Department of
Public Finances; Wu Chung-tai, deputy director of the National Federation of
Teachers Unions (NFTU); and Lee Chun-yi, DPP legislator from Chiayi City. DPP
Chair Su Tseng-chang, personally attended the forum from beginning to end.
Remarks by Legislator Lee Chun-yi:
The most important aspect of our nation's pension reform ought to be centered on the
principles of fairness and justice as well as solvency and sustainability. Based on that
notion, my review revealed the Examination Yuan and its reform bill failed to address
the principles that are most germane to our society.
The difference in pension rates for civil servants compared to regular laborers, as
suggested by the government's draft bill, is unfair and unjust. The Examination Yuans
draft bill would cause unfairness between generations because upon passage of thisbill, the newer recruits of civil servants and school teachers will bear the brunt of the
cut in their future retirement benefits. From an overall perspective, the draft bill not
only creates generational unfairness, it also causes conflicts among people with
different occupations. I call for a thorough deliberation on all aspects of the draft bill,
especially on the section that determines the unreasonableness in the pension rate for
civil servants and public school teachers.
1
7/30/2019 2013.04.Open Studio1 Confronting Pension Reform
2/3
Remarks by Wu Chung-tai, deputy director of the National Federation of
Teachers Unions (NFTU):
The draft bill, approved by the Examination Yuan, is "not worthy of saving". In the
best case scenario, the bill can only keep the civil service pension afloat for another
six years before it goes bankrupt, and five for teachers pension. At this rate, the draftbill bears little significance insofar as "efficient reform" is concerned. I question the
merit for this reform, calling it pseudo instead of real.
I suggest a two-pronged approach to rescue our pension plan: using year 2016 as a
cutoff point, we should create a new pension system so that in the future, both
pensions, new and old, can be reformed, rescued, or funded separately.
Lastly, I suggest accountability for those responsible for past policy mistakes.
Remarks by Professor Huang Shin-hsin:
Spending years on studying civil service retirement policies, basing their opinion on a
dodgy actuarial report, the whole society and especially the government, singled out
the insolvency as the crux of our pension problem, making the policy planning look
like a labyrinth. The referenced actuarial report is based on crooked probabilities and
analysis that are more dubious than the one used to sell commercial or business
insurance. Currently the pension savings account still has NT$3 trillion dollars to
cover the entire system. As to why the civil service pension continues to face a
mounting liability, it is because the civil servants are allowed to retire at a young age;
just by retiring 10 years early, retirees can put considerable strain on the system
because they stop paying for contributions and start collecting benefits.
The problem with our pension system is in its eligibility policy, which should be the
focus of our reform.
In a colloquial expression, the Examination Yuans draft bill appeared to be going
topsy-turvy.
One Tier Too Fat; Two Tiers Too Thin"; "Head Hurts Treat Foot; Foot Hurts CheckHead.
Even if civil service pension is reformed, the first tier pension benefactors can still
walk away with a whopping 40-60K monthly check while the poor laborers, under the
labor insurance, with the total of first and second tiers monthly benefits combined,
barely make 30K a month. The government should renounce a lopsided reform bill
like this.
2
7/30/2019 2013.04.Open Studio1 Confronting Pension Reform
3/3
Remarks by Professor Lin Wan-yi, executive director of the DPPs think tank:
The draft bill approved by the Examination Yuan is utterly unfair for the newer civil
service recruits. With regards to the pension rate for civil servants, it has recently beenmade more reasonable than it was before, nevertheless, the change, applicable only to
the new recruits, merely brings the pension rate more in tune with that of the regular
laborers.
Furthermore, already the public has misgivings about a policy that doesn't take effect
until year 2016. Still, the unfairness still exists between those civil servants that
retired in 2001 and the regular laborers. All in all, the procedural details and the
reform process for our various annuity programs, regardless of specific service sector
or between different occupational sectors, deserve our utmost attention. I urge the
government makes a real effort to listen in on the recommendations from all sides.
Note by editor: These remarks are translated from a press statement, and not
presented in full as delivered at the conference.
3