Taipei, June 23 (CNA) A draft bill to scrap the preferential 18 percent interest rate on monthly pension payments for Taiwan's retired civil servants passed the second reading in an extraordinary session of the Legislature on Friday.
Under the bill, which is expected to also pass a third reading and become law, the preferential bank savings rate for those who receive monthly pension payments will be reduced to 9 percent in the first and second year after the bill is put into force, expected in 2018, and cut to zero in the third year.
For retired civil servants who opted for a lump sum retirement payment, the preferential interest rate will decrease to 6 percent over a six-year period.
Meanwhile, another draft bill that passed the second reading in the Legislature would see the retirement income for retirees drop from 75 percent of their average level before retirement to 60 percent over a 10 year period if they have accumulated 35 years of service or more.
Retired civil servants with 15 years of service will see their retirement income drop to 30 percent of their pre-retirement level, from 45 percent, over a period of 10 years.
The draft bills are part of the President Tsai Ing-wen administration's reforms of Taiwan's deficit-ridden pension system.
