Pensioners should accept a reduction in handouts: NPP

GENEROUS SYSTEM:The nation’s pension system is a complicated web of different funds and guarantees, which have gradually accrued to workers in different sectors

By Abraham Gerber  /  Staff reporter

Retired military personnel, civil servants and public-school teachers should accept benefit cuts for the sake of generational justice, New Power Party (NPP) legislators said yesterday, calling for an equal replacement ratio for national pensions.

“There will necessarily be pain and the sacrifice of some vested interests as part of pension reform, but the sacrifices are not for the benefit of any particular group — they are for our next generation and our nation’s future,” NPP Executive Chairman Huang Kuo-chang (黃國昌) said, adding that excessively high income replacement ratios for former government employees were the primary source of “hidden debt” increasing the pressure on the budget.

The nation’s pension system is a complicated web of different funds and guarantees, which have gradually accrued to workers in different sectors with former government employees generally enjoying more generous coverage.

Chang said that former government employees with different pension systems receive pensions that are equal to between 70 and 100 percent of their former salaries, adding that “generational justice” requires that the government refuse assuming responsibility for meeting pension fund obligations after various funds go bankrupt.

“At a time when the nation’s finances face collapse unless reforms are enacted, talking about protecting vested interests is meaningless,” he said, “The government taking responsibility to meet the obligations would effectively shift the debts of this generation to the next.”

There is room for discussion on the precise legal definition of different government pension promises, along with the extent the promises could be constitutionally altered via legislation, he said.

In principle, any pension reform should adjust pension replacement ratios to make their underlying formulas equal across all sectors and occupations, he said, adding that his party would propose specific legislation after the Presidential Office’s pension reform commission makes its final recommendations next year.

Any pension reform plan should be equitable, guarantee a universal minimum pension and respect generational justice, while ensuring the system’s sustainability, NPP legislative caucus convener Hsu Yung-ming (徐永明) said.

He criticized a protest planned for tomorrow by retired government personnel for failing to outline a clear reform plan, accusing demonstrators of using the differences across occupations to obscure the importance of pension reform.

The NPP’s electoral platform last year called for canceling all non-pension benefits for government personnel while increasing their pension contributions and capping replacement ratios at between 60 and 70 percent.

The party also proposed transitioning to a “pay-as-you-go” pension system to replace the current pension system, which would serve as a “pool” for contributions from workers in different sectors.