Liberty Times (LT): What are your opinions on the national pension reform?
Chen Chien-jen (陳建仁): The current system is overly complicated. Not only are there different government agencies handling the same affairs, but the discrepancy of rates for different vocations are also too great. Above all, potential liabilities for all the different national pensions are at an alarmingly high level.
According to estimates, funding for military personnel’s, civil servants’ and teachers’ insurance will become insolvent in the next several years. Recent polls also show that a high percentage — 70 to 80 percent — of the public supports financial reforms and it is high time for the government to act. After all, compared with the past, the situation has become much more urgent.
Photo: Chen Chih-chu, Taipei Times
Taiwan has entered a new democratic age where the public wishes to have more say in how the government does things and we hope to arrange a series of open debates as quickly as possible — hopefully within the year — to address the issue.
The reforms are inevitably a cross-yuan effort, affecting many different departments and bureaus of the Executive Yuan, the Examination Yuan’s Ministry of Civil Service and the Legislative Yuan, to name a few.
In light of the amount of departments involved, we have decided to have the Presidential Office facilitate cross-departmental negotiations, as well as chair the national affairs forums in the future.
LT: How will you push for pension reform? What is the time frame and what methods are you thinking of using? Can you tell us your preliminary plans?
Chen: Compared with the nations in the Organisation for Economic Co-operation and Development (OECD) — especially in the areas of civil servants and education — Taiwan has a higher income replacement ratio. Therefore, when the nation faces financial difficulties, we would require reasonable reforms.
While these reforms should ensure that every Taiwanese would be able to receive a basic sum enabling them to have a dignified life in their old age, it must also consider the concept of intergenerational equity along with fairness in society and care for disadvantaged people.
The process of these reforms would need well-thought-out methods to include civic participation and debate if it is to achieve its goals.
Under the circumstances, it is necessary to make new estimates, comparisons and calculations for pension funds for different vocations. In the coming years, we will be offering a set of equations that would hopefully address different situations.
To fully include the opinions of people from all walks of life, the national pension reform committee, with me as the chair, will include military personnel, civil servants, teachers, workers, farmers, fishermen, women and young people. It will include working people as well as retired people, and government representatives and employers.
We estimate that the committee would have more than 30 members. At the latest, the committee would be holding its first meeting the week after president-elect Tsai Ing-wen (蔡英文) is sworn into office, followed by weekly meetings.
The reform process must be open and transparent if it is to facilitate a consensus and have open communication channels. Transparency must extend to debates on different retirement and insurance systems; the maximum amount of wages at the time of insurance; the income replacement ratio; insurance premiums; and the age when a person becomes eligible to receive pension are all information that should be made available.
Reforms aim to reach a reasonable rate through actuary data, while referencing other nations — especially OECD nations — for comparison.
We do not expect to create a one-time fix that would continue to be applied over the next century, but we hope our endeavors will at least maintain stability for one generation.
Second, we must have civic participation. Every step of debate will be streamed online, including timetables, the committee’s achievements and post-meeting notes.
Not only would this guarantee information transparency, it would also remind me and the committee that we are running out of time.
By our estimates, the committee has four to six months to deal with the process, after which they must begin offering draft plans for different reforms.
The plans must have a bare minimum required pension amount. If the goal is to simply avoid the collapse of the national pension system, but the pensions are unable to meet the lowest necessary expenditures of retirees, then it would mean the government is not working hard enough. The plans must also have a ceiling, ensuring those with high incomes do not receive more money than when they were working.
For example, if the pension equations were based on an average lifespan of 70 years, it would mean that today’s longer average life span — 80 years — is siphoning money from the young to subsidize the old, especially for those who are between 70 and 80 years old.
Is it to have extremely high premiums, particularly since it is the earnings of young people we are taking?
We must also consider if we should follow OECD nations and move back the age limit for pensions.
The public would be able offer opinions through the Internet or to the heads of the division in the committee after the plans are made. We would then be holding public hearings around the nation. If there are any suggestions at these public hearings, it would be forwarded to the committee, which would then make corrections after calculations.
Once the above steps have been completed, we hope to hold a national forum on the subject to vote on the pension plan.
Throughout these procedures, we have also factored in the time for possible public opinion polls to achieve further consensus, which we calculate would add another six months to the process.
So, in about a year, we expect to have a draft amendment to be forwarded to the Legislative Yuan, hoping to amend 13 different acts. While we would of course respect the natural order of progression of issues debated at the Legislative Yuan, we also hope the amendments would be passed as soon as possible.
LT: Will the reforms enacted by the incoming government be retroactive?
Chen: The people retired under the old system might not be able to hold up under such drain if we continue with the old system. Therefore, we must take both retirees and current workers into consideration and endeavor to include every aspect when making our plans.
This is also why we must have open channels of communication and provide scientific data to explain our actions.
My daughter is about 30 years old and some of her colleagues do not want to have funds deducted for Labor Insurance, because they are afraid they would lose everything if the fund goes bankrupt.
It is not just elderly people, but youths are also scared and uncertain. If the public, across all generations, is scared, then it means the government has done nothing.
LT: Previous governments have encountered great difficulty trying to enact reforms. What do you think is the primary cause for the obstacles?
Chen: The primary reason previous governments failed to reform the pension fund is that many of the separate insurance systems were all making their own individual attempts.
When I visited Examination Yuan President John Kuan (關中), he gave me four pages of advice.
According to Kuan, the government’s public hearings in the past consisted of mono-directional explanations and not mutual communication, making it difficult for the public to accept reform.
More importantly, the ministries were not really talking to each other, nor were they making comments during committee meetings so it was difficult to arrive at a consensus, and this is why we think the Presidential Office should have a prominent presence in the coordination of pension reform.
As mentioned by several former Examination Yuan presidents, the committee managing the pension fund is comparatively reserved, and the government must work to improve the fund’s performance.
The pensions system must also be tied to social safety systems to a certain degree. If a person on pension is healthy in mind and body and is capable of living independently, then they might feel the pension is sufficient. Therefore, we must promote healthy aging and incorporate preventative medicine, healthcare and long-term care into the pension system.
LT: Past administrations were able to win the trust and support of the public if they achieved one thing during their time in office. Pension reform should be the most important mission for the incoming government, as it has a wide impact.
Chen: For me, this issue — the national pension — would be our cross to bear. We must have wisdom, empathy and courage: wisdom to ensure that a sustainable model is derived from actuary science; empathy to care for people, especially disadvantaged people; and courage to negotiate a consensus amidst hardship and various challenges.
Only through empathy are we able to join together in building a new system that would provide for us all. The people on the right-hand side of an M-shaped society should be glad to take care of those on the left, while those with lower income should also be happy to see the high-income earners enjoy a slightly higher pension within limits.
Pension reform is a science and an art that hopes to achieve social consensus through democratic communication.
For us, it is a challenge made all the more daunting by social expectations, but we will give it everything we have despite the pressure.
Translated by Jake Chung, staff writer
‘DENIAL DEFENSE’: The US would increase its military presence with uncrewed ships, and submarines, while boosting defense in the Indo-Pacific, a Pete Hegseth memo said The US is reorienting its military strategy to focus primarily on deterring a potential Chinese invasion of Taiwan, a memo signed by US Secretary of Defense Pete Hegseth showed. The memo also called on Taiwan to increase its defense spending. The document, known as the “Interim National Defense Strategic Guidance,” was distributed this month and detailed the national defense plans of US President Donald Trump’s administration, an article in the Washington Post said on Saturday. It outlines how the US can prepare for a potential war with China and defend itself from threats in the “near abroad,” including Greenland and the Panama
The High Prosecutors’ Office yesterday withdrew an appeal against the acquittal of a former bank manager 22 years after his death, marking Taiwan’s first instance of prosecutors rendering posthumous justice to a wrongfully convicted defendant. Chu Ching-en (諸慶恩) — formerly a manager at the Taipei branch of BNP Paribas — was in 1999 accused by Weng Mao-chung (翁茂鍾), then-president of Chia Her Industrial Co, of forging a request for a fixed deposit of US$10 million by I-Hwa Industrial Co, a subsidiary of Chia Her, which was used as collateral. Chu was ruled not guilty in the first trial, but was found guilty
A wild live dugong was found in Taiwan for the first time in 88 years, after it was accidentally caught by a fisher’s net on Tuesday in Yilan County’s Fenniaolin (粉鳥林). This is the first sighting of the species in Taiwan since 1937, having already been considered “extinct” in the country and considered as “vulnerable” by the International Union for Conservation of Nature. A fisher surnamed Chen (陳) went to Fenniaolin to collect the fish in his netting, but instead caught a 3m long, 500kg dugong. The fisher released the animal back into the wild, not realizing it was an endangered species at
DEADLOCK: As the commission is unable to forum a quorum to review license renewal applications, the channel operators are not at fault and can air past their license date The National Communications Commission (NCC) yesterday said that the Public Television Service (PTS) and 36 other television and radio broadcasters could continue airing, despite the commission’s inability to meet a quorum to review their license renewal applications. The licenses of PTS and the other channels are set to expire between this month and June. The National Communications Commission Organization Act (國家通訊傳播委員會組織法) stipulates that the commission must meet the mandated quorum of four to hold a valid meeting. The seven-member commission currently has only three commissioners. “We have informed the channel operators of the progress we have made in reviewing their license renewal applications, and
RSS