Can Military, Civil Servants, and Educators’ Pensions Return to Defined Benefit System? 2023 Comparison of Old and New Pension Systems, Others Lament Strong Sense of Economic Hardship

This year marks a local election cycle in Taiwan, reigniting political debate over pension reforms and compensation adjustments for military personnel, civil servants, and educators. In early July, the Executive Yuan approved the '2024 Compensation Enhancement Plan for Military, Civil Servants, and Educators,' mandating a 4% across-the-board salary increase, along with a flat-rate increase of NT$2,000 for professional and supervisory allowances.

On July 3, the Legislative Yuan's Judicial and Legal Committee held a public hearing titled 'Legalization of Compensation Adjustments and Personnel System Reform for Military, Civil Servants, and Educators.' Huang Yao-nan, former chairman of the National Education Industry General Union, summarized his hearing remarks into nine key points on Facebook. In a recent post, he urged the swift legalization of compensation adjustments for military, civil servants, and educators, advocating that such adjustments should also drive wage increases for all salaried workers. 'Otherwise, despite Taiwan’s GDP surpassing that of Japan and South Korea, our salaries remain far lower—resulting in a very strong sense of economic hardship!'

How much will military, civil servants, and educators earn next year? The across-the-board raise is set at 4%. The 2024 salary adjustment will be implemented in two phases: first increasing allowances, then applying a general raise. Based on actual calculations, non-supervisory staff will see overall salary increases ranging from 5.88% to 9.98%, depending on rank. Supervisory staff, benefiting from increased supervisory allowances, could see raises as high as 11.56%.

This raise has once again brought the legalization of compensation adjustments into the political spotlight. In a press release, the National Union of Teachers’ Associations (NUTA) highlighted economic data from the past decade: while Taiwan’s per capita GDP and wages have grown significantly, military and educator compensation has risen by only about 14.74%—falling short of the 17.84% increase in the Consumer Price Index (CPI). NUTA argues that military and educator compensation should no longer be decided arbitrarily by administrative bodies without legal procedures.

After the hearing, Huang Yao-nan posted a summary of nine key points on Facebook:

- Comparison of historical salary adjustments for military, civil servants, and educators versus CPI growth - Comparison of historical salary adjustments versus minimum wage increases - International comparison of teacher salary levels - The Military and Civil Servants Compensation Review Committee should mirror the Minimum Wage Review Committee, with equal labor and management representation; the chair and vice-chair should be counted among agency representatives - Teacher representatives on the committee should be nominated by national-level teacher unions - Salary adjustments should occur at least every two years, with adjustment rates not lower than the cumulative CPI growth - Since 2024, CPI has cumulatively risen over 5%; current military and educator staff are confirmed for a raise on January 1, 2027; retired personnel should also be adjusted legally based on CPI growth - Military pensions should follow public servants and educators in halting cuts starting January 1, 2024, by amending relevant provisions of the Military Officers and Non-commissioned Officers Service Act - The new military, civil servant, and educator pension system, changed from defined benefit to defined contribution on July 1, 2023, should revert to the defined benefit system

What about talent shortages in military, civil, and education sectors? What did Huang Yao-nan say?

Huang also recalled that during the DPP government’s push for pension reform (‘Nian Gai’), he served as convener of the Supervisory Alliance for Pension Reform. After years of effort, legislative amendments to halt pension cuts were finally passed in 2025. He emphasized that the new pension system introduced in 2023 is flawed and unattractive to young people, leading to staffing shortages and talent drain. He stressed that pensions are deferred wages meant to attract top talent, and therefore advocated reverting the new system for 2023 entrants back to the 'defined benefit system.'

In closing, he noted that young military and public servants under the new system may not retire for another 20–30 years. While reverting to a defined benefit system is far more difficult than halting pension cuts, he believes success will eventually come.

What is the new military, civil servant, and educator pension system? How does it differ from the old?

Effective July 1, 2023, the new pension system shifted from a 'Defined Benefit (DB)' to a 'Defined Contribution (DC)' model. Key differences include:

- Defined Benefit (Old System): The retirement payout amount is predetermined. The government legally guarantees payments. If the fund is insufficient, the government bears ultimate financial responsibility. Operates as a pooled fund. - Defined Contribution (New System): The monthly contribution amount is fixed. Retirement benefits depend on contribution amounts, investment performance, and interest. Individuals hold personal retirement accounts and bear investment risks (with a minimum return guarantee mechanism). Operates as individual accounts.