Taipei--Taiwan's parliament, the Legislative Yuan, on Thursday passed a series of bills that will limit the retirement benefits of public school teachers, including by raising the retirement age at which the teachers can begin receiving pensions to 58, from an average age of around 53 at present.
The bills, which also include a proposal to change how teachers' monthly pensions are calculated, will be part of a new law on the retirement, pension and severance of public school teachers.
According to a new measure that passed a third reading Thursday, public school teachers who have served at least 15 years and reached the age of 58 can claim a pension, but the age should be adjusted over time based on changes in average life expectancies and demographic structures.
The retirement age of faculty at public colleges and universities will be raised by one year every year until it reaches 65 in 2026.
The bill also includes a proposal to adjust the basis for calculating public-school teachers' monthly pensions, which are currently based on their salary in their last month of service before retiring.
When the bill takes effect, teachers' monthly pensions will instead be based on their average monthly salary in their final five years of service and then adjusted during a period of 10 years to their average monthly salary over the final 15 years of service.
Meanwhile, a proposal to gradually phase out an 18 percent preferential interest rate public school teachers enjoy on their savings accounts also passed a third reading in parliament on Thursday.
Under the new regulation, the preferential 18 percent interest rate on savings for those who receive NT$32,160 (US$1,074) per month or more in retirement income will be reduced to 9 percent from July 1, 2018 to Dec. 31, 2020, and cut to zero starting Jan. 1, 2021.
In the case of retirees who opted for a lump sum retirement payment rather than a monthly pension, the preferential interest rate will decrease to 6 percent over a six-year period.
The bill, meanwhile, will also gradually lower the income replacement rate for pensioners who are receiving NT$32,160 per month or more.
Those with 35 years of service will see their income replacement rate drop from 75 percent to 60 percent of their pre-retirement income over a 10-year period, and those with 15 years of service will see a decrease from 45 percent to 30 percent over the same period of time, according to the bill.
Source: Focus Taiwan News Channel