2024-04-24 04:53:19
Labor insurance may go bankrupt during Lai Qingde’s term! “Pay less and receive more” has become an international spectacle Four major solutions to pension reform will prevent young people from assuming generational debts (Photograph-Tang Shaohang)
Written by: Editor-in-Chief of Today’s Weekly
According to the actuarial report of the labor insurance fund released by the Labor Insurance Bureau, in 2023, hidden liabilities soared to more than 13.04 trillion yuan, an increase of nearly 20% from Four years ago. The financial black hole is growing alarmingly. rate.
Indeed, since 2017, the labor insurance fund has no longer been able to make ends meet and annual contributions are not enough to cover benefits. If the government does not carry out any reforms, the labor insurance fund will go bankrupt in 2028 – that is, it will probably end under the new president Lai Ching-te.
In fact, if you look at different labor insurance benefit packages and compare them to the standards of advanced countries, you will be surprised to find that Taiwan’s annuity benefit standards are too lenient.
Judging by the benefit rate people are most sensitive to, according to a 2022 Organization for Economic Co-operation and Development (OECD) survey, the income replacement rate in Japan and South Korea does not is only 32% and 31% respectively, and that of Germany and the United Kingdom is around 40%. At the same rate. In Taiwan, the income replacement rate exceeds 63% and the rates paid are not as high as those in countries such as Germany, Japan and the United States. Kingdom.
What Taiwan lacks in promoting labor insurance reform is not a plan, but the determination of those in power, cooperation between the government and opposition, and consensus of the people. . In previous reform plans,Overpayment, underreceipt, delayed repayment, government grantsare all basic recipes.
“Delaying retirement has become an international trend!” Deng Mingbin, former director of labor insurance and deputy general director of the Center for Occupational Disaster Prevention and Reconstruction, pointed out that Taiwan will raise the legal claiming age of labor insurance to the upper limit of 65 years. 2026. He believes that postponement is always possible, but the reform must be accompanied by pragmatic support. The government must first create a friendly workplace for older workers before it can support annual reform and postpone retirement.
Currently, Taiwan only uses the best 5 years of insured salary as a reference for calculating benefits. Compared to advanced countries, which use almost lifetime insurance, Taiwanese standards are sometimes used for the best 25 or 35 years. The most reasonable method is to calculate the salary during the lifetime guarantee period. However, compared to the current system, the scope of reform may be too great; the 180-month version of Ma and Tsai’s version would be a more feasible approach.
As for the most controversial “benefit reduction”, the current 1.55% rate of seniority benefits is obviously too high. However, in reality, the average monthly application amount for elderly labor insurance benefits in 2023 is less than 19,000 yuan. Xin Binglong, associate professor at the National Institute of Development Studies at National Taiwan University, highlighted the key point: Taiwan’s guaranteed maximum wage has been stuck at NT$45,800 for a long time, and workers at High income earners are unable to report the truth, resulting in low payment amounts.
Xin Binglong believes that under this premise, no matter how the reforms are implemented, the impact on well-paid workers will be limited, while disadvantaged workers will have to pay a higher price. He suggested that insured salaries be increased by several levels to allow high-income earners to contribute more and broaden the contribution base; however, for the increase portion, the income replacement rate would be regressive and benefits would not increase proportionally.
Then, when it comes to discussing rate increases, many experts invariably highlight the concept of old debt and the division of old debt when analyzing the appropriate new rate. Simply put, if the new rate is adjusted to 16.27% in the future, the new financial institutions will only have to manage new payment rights, and no new debt will be incurred in the future, and Debts that have not been withdrawn in the past can be frozen.
“We need to restore the younger generation’s trust in the system and tell them that every penny they pay now is going towards their own future benefits, rather than taking on the debts of the previous generation.” Said Fu Congxi, National Taiwan University and member of the National Pension Reform Commission.
How does it work in practice? Fu Congxi gave an example. Assuming that the worker is now 40 years old and a new rate is adopted following the reform, the pension payment for retirement at age 65 will remain the same as the old seniority formula before the reform . the age of 40, and a new payment formula will be adopted for the new seniority, which will be processed in installments.
However, the outside world also has doubts regarding this idea, believing that following the reform, new bonuses will no longer cover past debts, which might accelerate bankruptcies. In this regard, Xin Binglong also agrees with freezing old debts, but believes that new insurance companies still need to share part of the old debts. In addition to self-sustaining breakeven rates, it might be possible to support an additional 2 or 3 percent. %.
The crisis of the bankruptcy of labor insurance looms before us. Faced with pension reform, Ma Ying-jeou once said: “If you don’t do it today, you will regret it tomorrow. a countdown to his successor. He once said, “If you don’t do it now, you will soon regret it.” » Tsai Ing-wen will also hand over the reins of power. In 2024, Lai Qingde will take on the important task of mine clearance. What will he do in the future? The entire nation is watching with eyes wide open. For more information, please refer to the latest issue of “Today’s Weekly” (issue 1427).
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Labor insurance may go bankrupt during Lai Qingde’s term! “Pay less and receive more” has become an international spectacle. Four major solutions to pension reform will prevent young people from assuming generational debts.
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