KMT passes legislation reversing DPP's 2018 pension reform

Taipei, Dec. 12 (CNA) The main opposition Kuomintang's (KMT) proposed amendments to raise pensions for retired civil servants and public school teachers, and end the 10-year period of pension cut that began in 2018, cleared Taiwan's Legislature on Friday.

Under the amendments to two pension laws, income replacement ratios for retirees, depending on recipients' years of service (ranging from 15 to 40 years), would be restored to their 2023 levels -- 39 to 71.5 percent -- up from this year's 36 to 68.5 percent.

The KMT's proposals stipulate that the ratios be maintained at 2023 levels, reversing the 2018 reform enacted by former President Tsai Ing-wen's (蔡英文) administration, which would have gradually reduced the ratios over the course of 10 years from 45 to 77.5 percent in 2018, to 30 to 62.5 percent by 2029.

Meanwhile, the revised laws require that pensions be adjusted when the cumulative growth rate of the Consumer Price Index (CPI) exceeds 5 percent.

They replace the current provision under which pensions are also reduced when prices fall by more than 5 percent.

On the two proposals, 52 KMT lawmakers voted in favor, while 50 DPP lawmakers present voted against them.

The Taiwan People's Party (TPP), which holds eight seats, was absent from the vote. The TPP had also proposed ending the 2018 reform policy but did not call for a return to the 2023 income replacement ratios.

During the debate on the legislative floor, Lo Chih-chiang (羅智強), secretary-general of the KMT legislative caucus, said that the 2018 pension-cut policy reflected the DPP administration's deep-seated animosity toward civil servants and public-school teachers and its efforts to stigmatize them.

The DPP's policy has led to an exodus of talent from the civil service and public school sectors, Lo said, adding that the KMT's proposal to halt the cuts was "a true reform."

In response, Cabinet spokesperson Michelle Lee (李慧芝) said the amendments were "highly regrettable" and would erase the phased gains from seven years of pension reform.

The amendments will accelerate the depletion of the pension funds, disregarding the interests of current civil servants and teachers and forcing taxpayers nationwide to cover the shortfall, Lee said.

The government will pursue legal and constitutional means to challenge the revisions and ensure the sustainability of the funds, she said.

According to the Directorate-General of Personnel Administration (DGPA) of the Executive Yuan, the pension funds for public school teachers and civil servants would run out in 2030 and 2031, respectively, had the 2018 pension-cut policy not been in place.

According to the Ministry of Civil Service under the Examination Yuan, which oversees retirement annuities for government employees, the amendments passed by the KMT are expected to deplete the public school and civil servant pension funds by 2042 and 2045, respectively, three to four years earlier than previously projected.