Parts of pension reform law violate Constitution: court (update)

08/23/2019 09:58 PM
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Taipei, Aug. 23 (CNA) Taiwan's Constitutional Court has ruled that some of the changes made to public employee pension laws in 2018 to push through pension cuts violate the Constitution.

The Constitutional Court made the announcement after issuing constitutional interpretations on three pension reform petitions filed by opposition Kuomintang lawmakers.

The controversial pension reforms targeting civil servants, public school teachers and military personnel, pushed by the Tsai Ing-wen (蔡英文) administration as one of its major achievements, took effect on July 1, 2018.

The policy cut pension benefits to public-sector workers to extend the life of those pension programs.

Justices of the Constitutional Court were asked to determine whether the revisions violated the principle of non-retroactivity, the doctrine of legitimate expectations, and the right to own property.

In its Constitutional Interpretations No. 781, No. 782 and No. 783, made public at 4 p.m. Friday, the court ruled that the reviewed laws were all consistent with the Constitution except for regulations stipulating that pensions would be suspended when public sector pensioners were hired by private schools.

One of the revisions the court objected to was to the Act of Military Service for Officers and Non-commissioned Officers of the Armed Forces (陸海空軍軍官士官服役條例).

It stipulated that pensions for retired military officers and sergeants would be stopped if they were employed as full-time teachers at private universities or colleges and paid a monthly salary higher than a government employee who receives Grade 1 pay (the most basic level) plus a professional stipend.

The provision violates the right of equality stipulated in the Constitution because it limits the right of the pensioners to work and treats them unfairly by not allowing them the same opportunities as others, the court said.

It also said that pensions could not be treated as deferred salary payments and that the total amount received depended on how long a retiree lives, and therefore their pensions should not be stopped even if they earn a salary somewhere else.

The same applied to similar regulations in the Act Governing Retirement, Severance and Bereavement Compensation for the Teaching and Other Staff Members of Public Schools (公立學校教職員退休資遣撫卹條例) and the Act Governing Retirement, Severance and the Civil Servant Retirement and Severance Pension Act (公務人員退休資遣撫卹法).

The two laws took effect in August 2017.

Vice President Chen Chien-jen (陳建仁), who served as the convener of the National Pension Reform Committee, said he respected the ruling.

Describing the ruling as affirming that most of the pension reform's content was constitutional, Chen said it signified that the government followed the right direction in its efforts to push for a "rational, healthy and sustainable" pension system.

"No present or retired military personnel, public servant or public school teacher has to worry that the Pension Fund is about to go bankrupt," he said.

The petitions had argued that the new laws overruled past legal facts and violated the principle of "non-retroactivity" and also denied pensioners benefits that had been promised as conditions of employment and that they could legitimately expect to receive.

The Constitutional Court determined, however, that while retired public-sector workers were receiving lower pensions, they were still in fact receiving a pension, which meant the revisions did not overturn a legal fact and were non-retroactive.

The court also ruled that the legal revisions did not violate the principle of legitimate expectations because the payments were reduced rather than completely revoked and the revised pensions as a percent of what people earned when they were still working were in line with international norms.

(By Lin Chang-chun and Elizabeth Hsu)


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