Sie sind auf Seite 1von 3

2013 Open Studio Series Confronting Pension Reform

Posted April 23, 2013 The Democratic Progressive Party (DPP) held the first of its 2013 Open Studio Series, 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 this bill, 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.

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 draft bill 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 Check Head. 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.

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 been made 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.