Aging population pushes Taiwan to reform pension system

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Taiwan authorities are considering pension reform as the island accelerates in becoming a hyper-aged society with only half of its population predicted to be working in 2060.

According the island's economic planning authorities, senior citizens over the age of 65 will triple from the current 2.6 million to 7.46 million, and only 51 percent of its population will be working.

Official statistics show that over 14 percent of Taiwan's population are over the age of 65, and 20 percent in 2020, reaching the global standard for a hyper-aged society

The life expectancy of male citizens will rise to 82 years from the present 76.7, and female to 88 from 82, adding more burden to Taiwan's pension system.

Local reports last month said that the potential debt of Taiwan's employment insurance fund amounted to 7.3 trillion New Taiwan dollars (251.7 billion U.S. Dollars). It is estimated that the fund will go bankrupt in 2027, and in turn a total of 9.45 million people will be impacted.

By contrast, servicemen, civil servants and teachers have stable pensions, making them the target of the public's complaints. People are worried that social divisions will accentuate without pension reform.

"The next 10 to 15 years will be the critical period for pension reform," said Chen Hsiao-hung, an official of Taiwan's economic planning authorities. He continued, "we need to reevaluate the pension system."

Chen added that the finances of the pension system will be improved and insurance rates will be raised.

Jiang Yi-Huah, the deputy head in charge of pension reform of Taiwan's executive branch, said they will hold various seminars around the island to reach out for public opinion, and put forward a reform plan in January.

Wang Li-ling, a professor from the department of commerce of Taiwan's Chungchi University, said reform should consider the equity between different generations.

She also suggested the authorities establish a reserves fund for supplementary financial resources, and invest the pension fund to infrastructure construction and quality enterprises.

As society is aging, experts estimate that in 2027, the demographic dividend that promoted Taiwan's economic takeover during the past decades will be used up.

Lin Wan-i, a professor from Taiwan University, said the curbing the aging population will be a long-term struggle, while raising the fertility rate is the key measure.

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