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Government stance on
fund undecided
POSITION UNCLEAR: DPP officials have questioned
KMT government decisions on various labor and pension funds, saying they have
been inconsistent
By Shih Hsiu-chuan and Chris Wang / Staff reporters
Democratic Progressive Party
legislators, from left to right, Tsai Chi-chang, Chiu Chih-wei, Pan Men-an and
Hsu Chih-chieh, attend a press conference at the Legislative Yuan yesterday
calling attention to the looming bankruptcy of the Labor Insurance Fund.
Photo: Wang Yi-sung, Taipei Times
The government’s position on looming
financial distress in the Labor Insurance Fund remained unclear as various
Cabinet officials offered conflicting statements on the problem since it was
highlighted in a report by the Council of Labor Affairs (CLA) on Tuesday.
Due to the rapidly aging population, the insurance fund — which provides money
for retired workers’ pensions — will begin to record a deficit in 2017, three
years before the original projection, the CLA report showed.
The CLA said the fund is headed for bankruptcy in 2027, rather than in 2031 as
previously projected, meaning that those who are 50 years old this year will
possibly be faced with a bankrupt labor insurance fund by the time they apply
for their pensions.
In a change of tone, at a press conference yesterday, Executive Yuan acting
spokesperson Huang Min-kung (黃敏恭) relayed a statement made by Premier Sean Chen
at a weekly Cabinet meeting yesterday saying that the government is duty-bound
to ensure the financial soundness of the fund.
“Premier Sean Chen said the government should definitely assume the ‘ultimate
liability’ for the final payment. People who enroll for the insurance may rest
assured,” Huang told a press conference following the Cabinet meeting.
In response to the release of the report, statements made by Chen differed from
comments made by Huang on Tuesday, when he said there was no need to make it
mandatory that the government is liable for the final payments.
Later yesterday, Huang clarified his comments, saying Chen did not use the term
“ultimate liability,” while he did promise that the government will monitor the
operation of the fund and revise the insurance program to address the problem.
In May, the CLA proposed an amendment to the Labor Insurance Act (勞工保險條例) to the
Cabinet, under which the CLA suggested that the government allocates a budget
for hidden losses incurred through poor fund investments, in addition to raising
insurance premiums.
The CLA proposal was not accepted due to opposition from the Ministry of
Finance.
Ministry of Finance Minister Chang Sheng-ford (張盛和) yesterday reiterated the
ministry’s position that raising the premium and improvement of fund
investments, rather than allocation of government budget, should be used to
resolve the deficit problem.
Separately yesterday, the Democratic Progressive Party (DPP) caucus demanded the
government allocate budgets in the next 10 years to save the Labor Pension Fund
from bankruptcy by 2027.
The administrative branch has violated a resolution of the Legislative Yuan in
2008 which asked the government to allocate budgets in 10 year’s time for hidden
losses incurred through poor fund investments, DPP Legislator Pan Men-an (潘孟安)
told a press conference.
The government’s action on various funds has been inconsistent, Pan said, as it
had allocated a total of NT$300 billion (US$10.3 billion) over 10 years
beginning in 2001 to the Civil Servant Pension Fund, which suffered similar
investment losses.
“You cannot save the civil servants but leave the laborers behind,” Pan said.
DPP Legislator Chiu Chih-wei (邱志偉) also questioned the Chinese Nationalist Party
(KMT) administration for its inconsistency.
While the CLA recommended raising the labor insurance premium rate to increase
revenues of the fund, Chiu said, the government has never recommended raising
the premium rate for the civil insurance program.
The measures were not only unfair as there are 500,000 civil servants and 10
million workers in Taiwan, he added, but could also lead to class and social
conflicts.
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