The Legislative Yuan’s bill on pension reform, passed on Tuesday, violates legal procedures and would be hard to implement, Premier Cho Jung-tai (卓榮泰) said on Facebook on Tuesday evening.
The legislature passed an amendment to the Police Personnel Management Act (警察人員人事條例) stipulating that the pension for police and firefighters as well as coast guard, immigration and air corps personnel would be based on the retiree’s years of service.
Those who have served 15 years would have an income replacement ratio of 43.25 percent.
Photo: CNA
Those who have served 36 years would receive the maximum income replacement ratio of 80 percent.
The amendment also stipulates that the new replacement rate would apply to those who retired prior to the amendment’s implementation.
According to Article 91 of the Budget Act (預算法), legislators should seek approval from the Executive Yuan for bills that “largely increase annual expenditures or decrease annual revenues,” Cho said.
However, the legislature failed to fulfill these requirements, passing an amendment that causes a national fiscal gap and increases expenditures without consulting the Executive Yuan, Cho said.
The legislature’s forced amendment of the law violates legal principles and undermines previous negotiations on the central government’s budget, he said.
The Executive Yuan cannot accept this, and the bill would be hard to implement, he added.
According to the Ministry of Civil Service’s calculations, this amendment would cause the retirement fund to be exhausted two years earlier, Cabinet spokeswoman Michelle Lee (李慧芝) said.
It is estimated that over the next 50 years, the combined reduction in fund income and increase in expenditures would amount to more than NT$170 billion (US$5.17 billion), Lee said.
This fiscal gap would need to be covered by the Executive Yuan’s public service budget, meaning that taxpayers would bear this burden, she said.
The Executive Yuan would explore possible constitutional remedies in accordance with powers granted by the Constitution, she added.
Solely raising the replacement rate for police officers’ retirement income violates the constitutional principle of equality, which requires fair treatment of all members under the public service pension system, the Ministry of Civil Service said in a statement on Tuesday.
Police officers and other civil servants, including those in high-risk jobs, are subject to the same pension laws and contribute at the same rates, the ministry said.
Comparisons to the 90 percent ratio for military personnel are inappropriate, it said.
Even with a higher replacement ratio, military personnel’s actual monthly retirement income is lower than that of police officers of equivalent rank due to the military’s maximum service term limits, it said.
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