'Aye' to Taiwan's pension reforms but panellists can't see eye to eye

TAIWANESE PRESIDENT TSAI ING-WEN , warning that the pension system will go bankrupt if nothing is done now.
TAIWANESE PRESIDENT TSAI ING-WEN , warning that the pension system will go bankrupt if nothing is done now.

Members at loggerheads even as bankruptcy looms for some pension funds in Taiwan

Stressing the urgent need to overhaul Taiwan's pension system, President Tsai Ing-wen told the newly formed Pension Reform Committee that if the island does not do it now, it will "regret it at once".

But in a sign of simmering tensions in the 37-strong panel, some members used the inaugural meeting to accuse the committee of marginalising their groups, calling it a product of "black box politics" dominated by backroom dealings.

Three members even walked out halfway through the three-hour meeting that was streamed live on the presidential office website on Thursday.

The committee comprises lawmakers, scholars, experts and representatives of the labour and youth movements, military and teachers' associations, among other groups.

The proposal to reform the government pension scheme, which will affect nearly 10 million out of 23 million Taiwanese people, has touched a raw nerve, especially among teachers, civil servants and military personnel.

They are unhappy over the possible slashing of monthly pension payouts, which now can amount to NT$60,000 (S$2,500) - nearly three times the starting salary of university graduates.

Saddled with the costly burden, young people are also disgruntled.

NO TIME TO WASTE

For some reforms, if you don't do it, you regret later. But pension reforms are so urgent that if we do not do it now, we will regret it at once.

TAIWANESE PRESIDENT TSAI ING-WEN , warning that the pension system will go bankrupt if nothing is done now.

At the same time, Taiwan's flagging economy - it grew 0.85 per cent last year - is unable to sustain the generous pension system that soaks up as much as 7 per cent of the government's budget.

The funds for teachers and the military are both in deficit, with the military's fund estimated to go bankrupt by 2018 and the teachers' fund in 2026 if nothing is done, local reports have said.

Retooling the pension system is one of the key reforms Ms Tsai pledged she would undertake in her inauguration speech last month, warning that the system will go bankrupt if nothing is done.

She repeated the warning on Thursday, saying people are most concerned about their economic security when they retire.

"For some reforms, if you don't do it, you regret later. But pension reforms are so urgent that if we do not do it now, we will regret it at once," she said.

Noting previous failed attempts to overhaul the pension system, Ms Tsai urged members to focus on the economic security of vulnerable groups, ensure the fiscal sustainability of the reforms and be transparent when tackling problems.

The weekly committee meetings, chaired by Vice-President Chen Chien-jen, are part of Ms Tsai's "bottom-up approach" to canvass for views from different groups.

A proposal is expected within a year.

But Mr Chen will also have to grapple with the differences among the committee members.

For instance at Thursday's meeting, Mr Wu Qi-liang from the veterans' association complained about servicemen being under-represented in the committee.

National Civil Servant Association president Li Lai-xi was one of the three people who walked out of Thursday's meeting.

He said: "There is no consensus on the proper procedure in making decisions. How can we just go along with it just to rush something out?"

A version of this article appeared in the print edition of The Straits Times on June 25, 2016, with the headline ''Aye' to pension reforms but panellists can't see eye to eye'. Print Edition | Subscribe