REFORM:The act, set to take effect on July 1 next year, will lower the income replacement ratio and conditionally phase out the controversial 18% savings rate
Date: Jun 28, 2017
By: Sean Lin / Staff reporter
The Legislative Yuan yesterday passed the Act Governing Civil Servants’ Retirement, Discharge and
Pensions (公務人員退休資遣撫卹法), marking a significant step in the government’s pursuit of pension reform.
The act, which is to take effect on July 1 next year, will lower the income replacement ratio for civil servants who have worked for 35 years from 75 percent to 60 percent over the course of 10 years, while the ratio for those who have worked for 15 years is to drop from 45 percent to 30 percent over the same period.
The 18 percent preferential savings rate given to public servants hired before July 1995 is to be conditionally phased out.
Retired civil servants under the “old” pension system predating July 1995 who chose monthly pension payments will no longer receive the 18 percent interest by the end of 2020. [FULL STORY]