Will Civil Servants' Pensions Increase? Lee Lai-hsi Predicts: Military, Civil, and Educator Monthly Pension Adjustment Will Exceed 'This Number'!

The Executive Yuan has completed preparations for next year's central government budget. Market speculation suggests that monthly pensions for retired military personnel, civil servants, and educators will be increased, with the adjustment expected to approach 6%.

Regarding this news, Lee Lai-hsi, former chairman of the National Association of Public Employees, stated in an interview that monthly pensions are legally required to be adjusted in line with the Consumer Price Index (CPI). He emphasized that this is a statutory obligation with no room for administrative discretion, and boldly predicted that the final approved adjustment rate will slightly exceed 6%.

Looking back at past adjustments, military, civil, and educator monthly pensions were raised by 2% in 2022 and 4% in 2024 in response to inflation. Last year, the Legislative Yuan passed an amendment to the Public Servants Retirement, Displacement, and Pension Act, which took effect on December 28. The amendment clearly stipulates that monthly pensions for retired public servants must be adjusted based on CPI growth whenever the cumulative rate reaches 5% or at least every four years.

Why must the adjustment happen this time? Lee Lai-hsi explained the key legal threshold.

Since the cumulative CPI growth since the last adjustment is estimated to have reached the statutory 5% threshold, the Executive Yuan has included the necessary funding in next year's central government budget. Lee stated that adjusting pensions in line with inflation is a legal obligation under the revised pension law enacted last year. Once the data meets the threshold, the adjustment must be accurately calculated and implemented, and the Executive Yuan must legally allocate the corresponding budget.

Regarding the rumored 6% adjustment, Lee believes it aligns with objective inflation trends. Based on current price movements, the final adjustment rate, after professional review and joint approval, is likely to slightly exceed 6%, adequately reflecting changes in the cost of living for retired civil servants and educators.

Why are 'Pension Cut Suspension' and 'Increased Replacement Rate for Police and Firefighters' not included? Three Different Budget Categories Explained

Although the monthly pension increase is included in the budget, the widely discussed 'suspension of public servant pension cuts' and 'increased replacement rate for police and firefighters' are not included, sparking public debate. Lee analyzed that these three issues operate under entirely different budget mechanisms within the central government's budget framework.

Lee explained that 'pension cut suspension' falls under existing budget categories and allocations for each agency and does not require additional budget increases. This is practically evident, as even though this year's budget has not yet been passed and no additional funds allocated, agencies are still distributing pension arrears based on Ministry of Examination re-evaluation notices.

In contrast, increasing the retirement income replacement rate for police and firefighters would immediately generate additional budget expenditures, requiring formal budget proposals from the National Police Agency. However, since the Executive Yuan did not approve it, it was not included in this year's budget.

Should the Replacement Rate Be Individually Increased? Debate Over Fairness in Public Servant Pension System

On the issue of police and firefighters seeking a separate increase in their retirement income replacement rate, Lee also shared his views on the overall fairness of the public servant pension system. He emphasized that all public servants contribute to the pension fund at the same rate during their employment. In practice, frontline healthcare workers during the pandemic also faced high-risk environments, while within police and fire departments, there are also non-hazardous administrative staff. Therefore, risk compensation should be addressed through actual job-based allowances.

Since all public servants bear the same contribution rate during employment, Lee argued that the same income replacement rate benchmark should apply uniformly upon retirement. He advocated for the complete abolition of the current mechanism that gradually reduces public servant retirement income replacement rates over ten years, returning the pension system to a more equitable and fair foundation.