Taipei-- Vice President Chen Chien-jen (???) announced Thursday nine key reforms to the country's pension system, aimed at allowing the funds that support the system to be able to last for at least one more generation.
Chen unveiled the planned reforms in a press conference at the Presidential Office, accompanied by Lin Wan-yi (???), deputy convener and chief executive of the Pension Reform Committee under the Presidential Office. Chen is convener of the committee.
The key reforms are as follows:
-- Ending a preferential 18 percent bank interest rate on pension deposits for public sector employees. The preferential rate will be gradually lowered to 0 percent within six years after the new measure goes into force.
-- Lowering the replacement rate of public servant incomes gradually to 60 percent.
-- Extending the insured salary payment period that is adopted as the basis for calculating pension payments.
-- Increasing the retirement age.
-- Raising the ceiling for the labor insurance premium rates to 18 percent.
-- Injecting government funds into the pension fund to secure financial sustainability for the pension system.
-- Putting forward a scheme that will allow employees to carry over their work years, upon which pensions are calculated, when they move to a different job.
-- Improving pension fund management to a professional and transparent level and increasing the investment efficiency.
-- Eliminating all the unreasonable aspects of the current system, such as one that benefits certain groups of the insured more than others.
Chen said that with the reforms, the government wants to extend the life of all the pension funds to last at least one generation.
The life of the public servant fund shall be extended to 2044, that of the pension fund for educational personnel shall be prolonged to 2043, and that of the labor fund shall be extended to 2036, he said.
Lin said they will be the first stage of reform to the pension system. "There will be a next stage of reform in the next 5 or 10 years," he said.
Also, the pension scheme for military personnel will not be discussed in the planned national conference on pension reform, scheduled to take place on Jan. 22, Lin added.
Source: Focus Taiwan News Channel