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Annuity Reform Planning Area

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1. Is the Pension going to bankruptcy?

A: If no elevation in the rate of set-aside and under the circumstances that the contributors are decreasing whilst the pensioners are increasing, the pension will see its unbalance and potentially end up as none.

2. If the pension goes bankruptcy, will it affect the right to have retirement pay?

A: Negative. As the pension of military members is accordingly supported by the responsibility of the government.

3. What is the current status of pension reform of military members?

A: Office of the President has promulgated “Points of National Pension Reform of Office of the President” on June 1st 2016 and the “Office of the Pension Reform” was founded by Executive Yuan to assist the administration. Each Thursday afternoon at 1430 the committee conference is held. In the future, MND will follow the reform policy of Executive Yuan in the consideration of the military feature. Under the circumstances to maintain the morality, ensure the national security and protect the rights of active or retired military members and their families, the relevant regulations will be went through with precaution to achieve the aim of pension reform.

4. Why should the privilege interest on deposit be subtracted for G2 Healthcare?
A:

1. According to Article 31 in “National Health Insurance Act” and other relevant subtraction rules of Ministry of Health and Welfare, if the insured receives interest on deposit more than NT$20,000 the approving agency should subtract “Supplementary insurance fee 1.91%” and transfer it to National Health Insurance Administration.

2. As a result of “Privilege Interest on Deposit for Retired Public Servants and Military Members” under the definition of “Interest Income”, Article 14, in “Income Tax Act”, if the privilege interest on deposit of military members was over NT$20,000 the amount would be subtracted by 1.91% by Bank of Taiwan as reception.

5. Why the unbalance happened to the pension fund of military members?
A: The force is also under reform of simplification and transforming to “Enlisting System” which cause increase in the numbers of retirement so that the amount of pensioners rises. Eventually the financial burden is heavier for the pension fund to support the increasing retired members.

6.What is MND’s interpretation on payment for retired members taking vacancies in government business or foundations?
A:1. Accordingly, the current pensioners should not receive pension after taking vacancies in government units. The payment rules for active public servants taking vacancies in government business has been instituted. Legislative Yuan has also made the decision that the pension and privilege interest on deposit would be terminated once taking vacancies in public serving units or government business. MND will fully implement the policy.
2. Considering the curb of serving duration, military members have higher demand for middle-age job search than normal public servants. To make payment rules thorough and maintain the temptation of job search, the policy is that if the payment of a transferred member is higher than NT$32,160, the pension and privilege interest on deposit will be terminated; however, if the later payment is lower, the subsidy will be given to reach NT$32,160 and at last, it is the aim to help control the fiscal balance. 

7.Is the privilege interest on deposit (18%) included in income replacement ratio?
A: The income replacement ratio indicates that “those with monthly pension income higher than the limit ratio should be granted less applicable amount of money for privilege interest on deposit in order to contain it in the range of limit ratio.

8.What’s the mechanism of pension fund?
A: In the light of Article 8 in Management Act of Pension Fund of Retired Public Servants, the pension is under a united management with separate accounts dependent on government units or identities. By the principle of account balance, if there is annual surplus it will fully be moved to the fund; if the fund is short, it should be reviewed to make adjustment or be subsidized by the government which takes the eventual responsibility of payment.

Information date: 2016/12/11