Taipei: The main opposition Kuomintang (KMT) has successfully pushed through legislative amendments aimed at raising pensions for retired civil servants and public school teachers, effectively ending the 10-year pension cut initiated in 2018. The amendments were approved by Taiwan's Legislature on Friday.

According to Focus Taiwan, the newly passed amendments adjust the income replacement ratios for retirees based on years of service, ranging from 15 to 40 years. These ratios will be restored to their 2023 levels, between 39 to 71.5 percent, reversing the 2018 reforms by the Democratic Progressive Party (DPP) which had gradually decreased the ratios. The DPP's original policy intended to lower these ratios from 45 to 77.5 percent in 2018 to 30 to 62.5 percent by 2029.

The revised legislation also mandates that pensions be adjusted when the cumulative growth rate of the Consumer Price Index (CPI) exceeds 5 percent. This replaces the current provision that allowed for pension reductions when prices fell by more than 5 percent.

The legislative vote saw 52 KMT lawmakers in favor, while 50 DPP lawmakers opposed the changes. The Taiwan People's Party (TPP), holding eight seats, was absent from the vote, although they had also proposed ending the 2018 reform policy without advocating for a return to the 2023 income replacement ratios.

KMT legislative caucus secretary-general, Lo Chih-chiang, criticized the 2018 reform, describing it as a manifestation of the DPP administration's animosity toward civil servants and public-school teachers. He claimed the DPP's policy had led to a talent exodus in these sectors and described the KMT's proposal as "a true reform."

In contrast, Cabinet spokesperson Michelle Lee expressed regret over the amendments, arguing that they negate the progress made over seven years of pension reform. She warned that the changes would hasten the depletion of pension funds and shift the financial burden onto taxpayers. The government plans to challenge the revisions through legal and constitutional avenues to protect the sustainability of the pension funds.

The Directorate-General of Personnel Administration (DGPA) of the Executive Yuan projected that, without the 2018 cuts, the pension funds for public school teachers and civil servants would be depleted by 2030 and 2031, respectively. The Ministry of Civil Service under the Examination Yuan, which oversees retirement annuities for government employees, now anticipates that the funds will run out by 2042 and 2045, respectively, three to four years earlier due to the KMT's amendments.