Taiwan's new system of retiring military public education has been implemented since July 2018, and a recent investigation by the Taiwan Audit Department found that most of the actual investment returns of the retirement fund cannot reach the target, and in addition, after July 2023, the newly recruited public servants will re-establish the retirement system, and the balance of the existing retirement fund in 2041 will begin to appear negative, once again facing the problem of heavy financial burdens.
Primary and secondary school teachers in Taiwan protested that the pension reform policy was too "crude and unreasonable" and held posters to express their dissatisfaction. (Image source: Taipei Zhongshi News Network data map)
According to the comprehensive Taipei Zhongshi News Network and the Hong Kong China Commentary Agency, the Audit Department pointed out that as of the end of last year, the retirement fund should receive benefits, and the actuarial present value of the future net benefits of incumbents was about 3.38 trillion yuan (NT$, the same below), deducting more than 649.6 billion yuan of the retired and retired funds, and the unrespented actuarial accrual liabilities were still as high as 2.79 trillion yuan.
Moreover, the investment performance of the fund in the past 10 years has been between negative 5.98% and 10.62%, which has failed to meet the target return rate recommended in the actuarial report for several years, and it is difficult to rely only on improving the return on investment to achieve the long-term financial stability goal of the fund.
In addition, according to Article 93 of Taiwan's "Pension Law on Retirement Pensions for Public Servants", the retirement system for newly appointed public servants after July 1, 2023 will be re-established by the Ministry of Quanxu, and if new public servants set up a new fund and do not participate in the retirement fund, the balance of the retirement fund in 2041 will begin to negative, and they will once again face the problem of heavy financial burden of the retirement fund.
Therefore, the Audit Department requested the Retirement Fund Management Committee to evaluate the relevant recommended measures of the Seventh Actuarial Report as soon as possible on the different retirement systems for the current and future new public servants, and adopt feasible schemes such as increasing the allocation rate to 18% year by year or the government to inject funds to ensure the financial sustainability of the Retirement Fund.
In order to improve the financial situation of the retirement fund, the government has implemented the reform of the military public education retirement system since July 2018, according to the statistics of the retirement fund, the funds saved in the second half of 2018 and 2019 reached 14.077 billion yuan and 28.691 billion yuan respectively, and the retirement fund was injected in 2020 and 2021.
The Examination Yuan and the Executive Yuan also announced on September 14 last year that the withdrawal rate of the retirement fund will be increased by 1 percentage point per year from this year to 15% in 2024, and it is expected to increase by about 5.3 billion yuan per year.
However, according to the conclusions and recommendations of the Actuarial Assessment Report of the Seventh Actuarial Labor Procurement Case of the Retirement Fund, if a public official wants to apportion past liabilities, the most appropriate rate of withdrawal is 26.27%, and even if the past liabilities are not apportioned, the most appropriate rate of withdrawal is 16.28%. (End)