You know that the PAP is going to make changes to the CPF when such articles appear in the PAP press ...
Bankrupt pension systems a modern crisis
Tom Pu Chih Hsieh
The bankruptcy of public pension funds is an issue worldwide.
According to a recent study conducted by Allianz, pension systems in most Asian countries are "fragile and unstable".
Hong Kong and Singapore are the only counties in Asia to rank within the top 20 nations worldwide for pension sustainability.
Western countries face the same problem. The world's 20 richest nations are facing US$78 trillion (S$106 trillion) in combined pension liabilities.
In Germany, France, Italy, England, Portugal and Spain, pension fund liabilities amount to more than three times each country's national gross domestic product (GDP).
In Taiwan, the pension issue is particularly severe.
Civil servants have taken to the streets to protest against the government's plan to cut their benefits, while a smear campaign accuses them of causing the pension system's woes in the first place. It is unusual for teachers, soldiers and public servants - usually seen as some of the most stabilising forces in society - to take to the streets and protest against their own government.
Of course, it is not fair to make civil servants the scapegoats for the system's impending bankruptcy.
After all, the system was designed by the government. But it is also hard to neglect the fact that, in Taiwan, the average monthly pension for civil servants is at least three to four times higher than that of those in the private sector.
Not to mention that funds for civil servant pensions are derived mainly from taxes paid by companies and non-public sector workers.
It is similarly difficult to overlook the depravity of a system that allows a retired civil servant to receive a pension three to four times higher than the salary of a hard-working young person.
These factors have sown discord among the populace.
They also make it hard for ordinary workers to lend a sympathetic ear to the retired civil servants asking the government to bail out their pensions.
If the government follows the doctrine of legitimate expectation and pays retired civil servants what they have demanded, it will crowd out government funding for other social welfare projects.
After all, it is not only the pension system for civil servants that is facing bankruptcy.
Dissatisfaction is a natural response from ordinary workers and has allowed the call for cuts to civil servant pension funds to go viral. It has caused disputes between civil servants and non-public sector workers. The threat of social disorder is growing stronger.
Two major factors threaten pension systems worldwide: reduced birth rates and the widening gap between the rich and the poor arising from economic liberalisation.
Pension systems require contributions from the workforce to function. If more retired people receive pension payouts and fewer working people contribute to the fund, the system is doomed to fail - unless the government steps in. This is already happening in developed countries.
Baby boomers are now at retirement age but find their pensions shrinking because fewer people are contributing to the pool - a consequence of the reduced birth rate. Baby boomers, especially civil servants, are asking the government to allocate taxpayer funds to the pool to fulfil past promises. It is estimated that Taiwan's pension system for civil servants will be depleted in 10 years if no drastic changes are made to the current system.
Some younger civil servants even said they would stop contributing money to the retirement fund, as its imminent bankruptcy means there is little incentive for them to contribute.
Another phenomenon in capitalist counties is growing wealth inequality.
In recent years, almost 90 per cent of global wealth has been concentrated in the hands of 10 per cent of the population in the name of economic liberalisation.
Although there seems to be a big difference between the economic situations of civil servants and non-public sector workers, actually, in relative terms, both groups belong to the new poor.
A responsible government should never teach one poor group to hate another poor community by identifying the latter as a scapegoat.
Irresponsible politicians might seek to divert the public's attention from their inability to manage the country's finances by creating social conflict, but they will ultimately face the consequences of tearing the country apart.
Taiwan's government is preparing to make laws to alter its income replacement ratio, which is currently the highest on earth. A retired civil servant in Taiwan usually gets more than 100 per cent; in most countries, the ratio usually ranges between 50 per cent and 70 per cent.
Other methods for pension reform are also up for discussion, such as delaying pension fund payouts until retirees reach a certain age, providing lower payouts to retirees and mandating higher monthly contributions from working people.
Besides encouraging systematic reforms to pension funds themselves, a good government should always try to revive the economy and encourage the rich to reinvest their profits in the country.
By creating investment opportunities and urging entrepreneurs to be more aware of their social responsibilities, the gap between the rich and the poor can be narrowed and the government can secure more funding to salvage the pension system.
- See more at: http://business.asiaone.com/news/bankrupt-pension-systems-modern-crisis#sthash.ogDdJDhN.dpuf
Bankrupt pension systems a modern crisis
Tom Pu Chih Hsieh
The bankruptcy of public pension funds is an issue worldwide.
According to a recent study conducted by Allianz, pension systems in most Asian countries are "fragile and unstable".
Hong Kong and Singapore are the only counties in Asia to rank within the top 20 nations worldwide for pension sustainability.
Western countries face the same problem. The world's 20 richest nations are facing US$78 trillion (S$106 trillion) in combined pension liabilities.
In Germany, France, Italy, England, Portugal and Spain, pension fund liabilities amount to more than three times each country's national gross domestic product (GDP).
In Taiwan, the pension issue is particularly severe.
Civil servants have taken to the streets to protest against the government's plan to cut their benefits, while a smear campaign accuses them of causing the pension system's woes in the first place. It is unusual for teachers, soldiers and public servants - usually seen as some of the most stabilising forces in society - to take to the streets and protest against their own government.
Of course, it is not fair to make civil servants the scapegoats for the system's impending bankruptcy.
After all, the system was designed by the government. But it is also hard to neglect the fact that, in Taiwan, the average monthly pension for civil servants is at least three to four times higher than that of those in the private sector.
Not to mention that funds for civil servant pensions are derived mainly from taxes paid by companies and non-public sector workers.
It is similarly difficult to overlook the depravity of a system that allows a retired civil servant to receive a pension three to four times higher than the salary of a hard-working young person.
These factors have sown discord among the populace.
They also make it hard for ordinary workers to lend a sympathetic ear to the retired civil servants asking the government to bail out their pensions.
If the government follows the doctrine of legitimate expectation and pays retired civil servants what they have demanded, it will crowd out government funding for other social welfare projects.
After all, it is not only the pension system for civil servants that is facing bankruptcy.
Dissatisfaction is a natural response from ordinary workers and has allowed the call for cuts to civil servant pension funds to go viral. It has caused disputes between civil servants and non-public sector workers. The threat of social disorder is growing stronger.
Two major factors threaten pension systems worldwide: reduced birth rates and the widening gap between the rich and the poor arising from economic liberalisation.
Pension systems require contributions from the workforce to function. If more retired people receive pension payouts and fewer working people contribute to the fund, the system is doomed to fail - unless the government steps in. This is already happening in developed countries.
Baby boomers are now at retirement age but find their pensions shrinking because fewer people are contributing to the pool - a consequence of the reduced birth rate. Baby boomers, especially civil servants, are asking the government to allocate taxpayer funds to the pool to fulfil past promises. It is estimated that Taiwan's pension system for civil servants will be depleted in 10 years if no drastic changes are made to the current system.
Some younger civil servants even said they would stop contributing money to the retirement fund, as its imminent bankruptcy means there is little incentive for them to contribute.
Another phenomenon in capitalist counties is growing wealth inequality.
In recent years, almost 90 per cent of global wealth has been concentrated in the hands of 10 per cent of the population in the name of economic liberalisation.
Although there seems to be a big difference between the economic situations of civil servants and non-public sector workers, actually, in relative terms, both groups belong to the new poor.
A responsible government should never teach one poor group to hate another poor community by identifying the latter as a scapegoat.
Irresponsible politicians might seek to divert the public's attention from their inability to manage the country's finances by creating social conflict, but they will ultimately face the consequences of tearing the country apart.
Taiwan's government is preparing to make laws to alter its income replacement ratio, which is currently the highest on earth. A retired civil servant in Taiwan usually gets more than 100 per cent; in most countries, the ratio usually ranges between 50 per cent and 70 per cent.
Other methods for pension reform are also up for discussion, such as delaying pension fund payouts until retirees reach a certain age, providing lower payouts to retirees and mandating higher monthly contributions from working people.
Besides encouraging systematic reforms to pension funds themselves, a good government should always try to revive the economy and encourage the rich to reinvest their profits in the country.
By creating investment opportunities and urging entrepreneurs to be more aware of their social responsibilities, the gap between the rich and the poor can be narrowed and the government can secure more funding to salvage the pension system.
- See more at: http://business.asiaone.com/news/bankrupt-pension-systems-modern-crisis#sthash.ogDdJDhN.dpuf
how much they left with after working their ass off 
