Will Military, Civil Servant, and Teacher Pension Back-Payments Be Recovered? Li Lai-hsi Hints at Next Steps After Receiving Tens of Thousands – Executive Yuan Responds

It has been eight years since Taiwan's pension reform (nian gai) took effect on July 1, 2018. A major turning point came at the end of last year (2025), when the Legislative Yuan passed the 'pension cut suspension' bill in its third reading. Although the Executive Yuan has filed a constitutional appeal, the back-payments for 'over-deducted pension amounts'—affecting approximately 180,000 retired military personnel, civil servants, and teachers—have recently been credited to their accounts.

In response, the Executive Yuan stated today (June 1) that it respects the authority of the Civil Service Protection and Training Commission (CSPTC) and individual agencies to issue pension recalibration notices and disburse arrears under the new law. However, the Executive Yuan emphasized that its position remains unchanged: it hopes the Constitutional Court will swiftly review and issue a ruling on the matter.

What is the income replacement rate standard after the pension cut suspension? Recalculation of pension arrears to be completed by August

The 2018 pension reform included measures such as phasing out the 18% preferential deposit rate and gradually reducing the income replacement rate for civil servants and teachers from a maximum of 75% down to 60% (a 1.5% annual reduction). However, at the end of 2025, the Legislative Yuan passed amendments to the Civil Servants Retirement, Discharge, and Pension Act and the Public School Staff Retirement, Discharge, and Pension Ordinance, halting the annual reduction in pension income replacement rates that had been scheduled to continue from 2024 onward. Instead, the rate will revert uniformly to the 2023 standard.

According to the CSPTC, the 'pension arrears' resulting from recalculation between the law’s effective date (December 28, 2025) and July 31, 2026, will be fully disbursed by all agencies no later than August 1, 2026.

Are over-deducted amounts fully reimbursed? Controversy over 2024 and 2025 arrears

In response, Li Lai-hsi, former chairman of the National Civil Servants Association and a leading figure in the anti-pension reform movement, recently confirmed on Facebook that the pension arrears for January to July of this year have finally been credited. He described the 'tens of thousands of dollars' received as the fruit of years of effort, offering some relief to retired civil servants amid soaring inflation. However, Li pointed out that while minimum wages and labor insurance allowances are adjusted annually with inflation, military, civil servant, and teacher pensions continue to shrink year after year.

In a recent post, Li emphasized that the current reimbursement only covers over-deducted amounts for 2026 and halts the annual reduction in retirement benefits. The over-deductions from 2024 and 2025 remain unresolved. He stated that the next step will be to monitor whether retirement income is adjusted in line with inflation indices, and that the next phase of advocacy will demand the termination of the 10-year policy of gradually reducing income replacement rates.

Why is the 'pension cut suspension' controversial? Could disbursed arrears be reclaimed after constitutional review?

Looking back at the controversy, after the bill passed its third reading in the Legislative Yuan and was promulgated by the Presidential Office, the Executive Yuan, Examination Yuan, and the DPP legislative caucus all filed constitutional appeals. No ruling has yet been issued. The CSPTC previously stated that even if the Constitutional Court has not ruled by August 1, it will proceed with disbursement.

Regarding retirees who have already received arrears payments up to July, Executive Yuan spokesperson Lee Hui-chih responded that the Judicial Yuan’s Grand Justices ruled in 2019 that the direction and design of the pension reform were constitutional. However, she acknowledged that the current 'pension cut suspension' amendment does increase government fiscal expenditure, which is why the Executive Yuan filed the constitutional appeal and hopes the Constitutional Court will swiftly review and issue a judgment.

Can the CSPTC disburse funds before the constitutional ruling? The Executive Yuan’s stance

Lee Hui-chih stated that although the Constitutional Court has not yet issued a ruling, the CSPTC has already issued recalibration notices to civil servants under the new law. The Executive Yuan respects the authority of the Examination Yuan and disbursement agencies. For education personnel, the process will proceed in parallel with civil servants.

The Executive Yuan emphasized that the government has consistently protected the rights of civil servants and teachers. Since 2016, it has adjusted military, civil servant, and teacher compensation four times, cumulatively increasing salaries by 14.7%. In July of this year, professional and managerial allowances were each increased by NT$2,000. Starting next year, a 4% across-the-board salary adjustment will be implemented. Overall, civil servant compensation is expected to increase by 5.88% to 9.88% next year.