Despite upsetting people, reform helps development: president

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Tsai Ing-wen (蔡英文) (Photo courtesy of NOWnews)

Taipei, April 9 (CNA) President Tsai Ing-wen (蔡英文) said Monday that pension reform undertaken by her administration has strengthened the nation’s financial position and enabled the government to better address issues concerning Taiwan’s long-term development.

Changes to the pension systems for civil servants, public school teachers and political appointees that were pushed through by her administration last year has upset many people, but “society as a whole” is grateful to those who have been adversely affected, Tsai said.

“Many people took offense at me (because of the reform). This is undeniable. We all owe them thanks. Their sacrifice has given momentum to the nation’s sustainable development.”

Tsai said the money saved by cutting the retirement benefits of those groups will keep the pension systems that were on the brink of bankruptcy solvent for the next 30 years.

It will also allow the government to embark on programs that will bring Taiwan progress, she said.

For example, government employees, public-school teachers and military personnel got a 3 percent raise this year, and that has led private enterprises to raise salaries as well, Tsai said in an interview with ERA news broadcast Monday night.

The launch of the Forward-looking Infrastructure Program aimed at bolstering Taiwan’s economic development and the progress made in providing coverage of long-term care services were also made possible by the pension reforms, Tsai argued.

On changes to the military pension system, which are still being deliberated by the Cabinet, Tsai said the minimum pension for military retirees is expected to be set at NT$38,990 (US$1,326), higher than the NT$32,160 floor for retired public-school teachers and civil servants.

That would mean that 60 percent of military retirees would not be affected by the changes, Tsai said.

Tsai added that her administration would not shy away from reforming the labor insurance system, which affects 10 million people and provides pensions for private sector employees, for fear of displeasing voters.

Compared to the pension systems for public employees, however, reforming the labor insurance system will be more complicated because it would also involve private employers and not just the government as was the case with public employees, Tsai said.

Employers contribute 70 percent of each employee’s premiums in the labor insurance system.

“There will be a tremendous amount of work that needs to be done in terms of communication. That’s why we decided to deal with other pension reforms first,” she said.

(By Shih Hsiu-chuan)