Taiwanese Protest Against Pension Reform Plan

Protesters throw fake banknotes during the rally outside the Presidential Office in Taipei, Taiwan, on Jan. 22.Protesters throw fake banknotes during the rally outside the Presidential Office in Taipei, Taiwan, on Jan. 22.

Thousands of military personnel, teachers, police and civil servants protested a plan to reform Taiwan’s pension system outside of the Presidential Office in Taipei on Sunday, as a national conference to discuss reform was held in the Office.

Vice President Chen Chien-jen announced a pension reform plan this week for teachers, civil servants and non-government employees, which would delay a default in payments to retirees by a decade, Reuters reported.

The plan has angered the island’s public servants, many of whom say it would ruin their retirement plans and that it demonstrates incompetence by President Tsai Ing-wen.

Police said about 12,000 people are estimated to have taken part in the demonstration.

Pension reform is critical for Taiwan as large payouts are no longer sustainable for the export-reliant economy, with contributions crimped by slower economic growth and a rapidly aging population.

A successful reform will be crucial for President Tsai, whose popularity has hit an all-time low since taking office last May. She has said reforms are “urgent” given limited national and social resources, and that she wants pension reform bills passed by the legislature this spring.

“The point is to ensure that Taiwan’s pension system will remain a solvent system, which the government can afford while also ensuring that retirees can get their pensions,” said Tsai, in opening remarks at the conference, where government officials are discussing the plan with public servant representatives.

Underfunded liabilities of public and labor sector pensions were expected to hit a record T$18 trillion in 2016, nine times the government’s annual budget expenditure and a big leap from T$12 trillion a decade ago.

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