Apr 02, 2017 General Comments Off on Government plans to cut pensions for retired political appointees
Taipei--A plan to cut the retirement benefits of retired political appointees has been submitted to the Examination Yuan for review as part of the government's pension reform initiative, the Ministry of Civil Service said Sunday.
The plan proposes to cut the retirement income replacement rate for some retired political appointees to as low as 50 percent and phase out the preferential 18-percent interest they draw on retirement savings accounts over a period of six years, the ministry said.
Political appointees who retired before Dec. 31, 2003 have been a target of criticism because they were able to count the time they worked as civil servants toward their total years in service and be entitled to higher pension payments.
In response, the ministry drafted a proposal to amend the Act Governing the Recompense for the Discharge of Special Political Appointees, which was submitted to the Examination Yuan on March 24 and is expected to affect 500 people, it said.
The proposed amendments stipulate that senior political appointees with 35 years of service would see their income replacement rate drop from 75 percent to 60 percent in 15 years, while special political appointees with 35 years of service would see their income replacement rate drop from 65 percent to 50 percent in 15 years.
Similar to a pension reform plan for retired public servants, the draft also has proposed to phase out the 18-percent interest on political appointees' retirement accounts over six years.
The preferential interest rate was introduced in 1960 for retired military officials, civil servants and public-school teachers when the average income of people in the three professions was lower that that of people working in the private sector.
According to ministry data, 542 retired political appointees in eight categories have received pensions, including 235 who receive monthly pension payments.
The average monthly pension payments of the 235 retirees was NT$117,393.
As for the preferential interest rate system, there was NT$1.21 billion deposited in 541 bank accounts held by these retirees as of June 2016 on which they could draw 18 percent interest, according to the data.
In 2015, the government, which subsidizes the program, and Bank of Taiwan made interest payments of NT$170 million and NT$36 million on those accounts, respectively, according to the data.
Source: Focus Taiwan News Channel
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