Lee Lai-hsi Predicts 'Adjustment Ratio Over 6%!' Calls for Military and Civil Servants' Monthly Pension Increase, but 'Category 2 Civil Servants' Pay Raise Stalls

The central government's total budget proposal for the next fiscal year has reached a record high of NT$3.6 trillion, marking a significant increase of over NT$500 billion compared to the current year's budget. However, this massive budget proposal has sparked strong criticism and controversy in the Legislative Yuan for failing to include funding for legislation already passed in three readings—specifically, salary increases for military personnel and adjustments to the retirement benefit replacement rates for police and firefighters.

Blue camp legislators have strongly questioned why, despite such a dramatic expansion in the overall budget, the government cannot allocate a few hundred billion NT dollars required for these passed bills. In response to opposition party criticism, the Executive Yuan emphasized that it will communicate with the Legislative Yuan by October at the latest, in accordance with prior cross-party negotiation agreements.

The core of the controversy lies in two legislative amendments—the 'Military Personnel Treatment Act' and the 'Police Personnel Personnel Regulations'—passed in three readings by the Legislative Yuan last year. According to previous estimates, the military pay raise and increasing the volunteer service allowance to NT$30,000 would affect approximately 150,000 volunteer officers and soldiers. The Ministry of National Defense estimated this would require an additional annual expenditure of NT$30 billion. Raising the retirement benefit replacement rate for over 33,000 retired police and firefighters to 80% is estimated by the Blue camp to cost around NT$3.5 billion annually. Combined, these two legislative amendments require only NT$33.5 billion in budget allocation.

Why have these three-reading-passed bills not yet been implemented? Blue camp legislators and retired police groups have launched fierce criticism.

Regarding the Executive Yuan's application for constitutional interpretation and temporary injunction on the grounds of increased fiscal expenditure, and its failure to include related funding in the budget, KMT legislator Lai Shih-pao pointed out that the defense budget has already been significantly increased to over NT$900 billion, while the military pay raise requires only about NT$30 billion. Legally, the Executive Yuan should have included and executed the funding even before the constitutional interpretation ruling. KMT legislator Lin Te-fu also questioned on the 6th why the government is not implementing the three-reading-passed bills, emphasizing that military, police, and firefighters who have dedicated themselves to the nation should not be treated this way.

Retired police groups have also expressed strong dissatisfaction. Huang Chi-tse, President of the General Association of Retired Police Personnel of the Republic of China, stated that after the legislative amendments were passed and promulgated by the president, retired police officers, who have devoted their lives to social security, simply expect the government to administer according to law. The General Association will continue to deliberate on future response measures.

Regarding adjustments to the treatment of active and retired personnel, the Executive Yuan finalized the '2025 Military, Civil Servants, and Teachers Salary Enhancement Plan' in early July, confirming an overall salary increase of 4%. Executive Yuan Secretary-General Chang Tuan-han explained that the central government's total budget for the next fiscal year is in its final stages, and the salary increase plan for military, civil servants, and teachers has already been included. As for the increase in leadership and professional allowances for military, civil servants, and teachers effective from July, a supplementary budget will be submitted after the current year's total budget review is completed.

Meanwhile, market rumors suggest that the monthly retirement pensions for retired military, civil servants, and teachers will increase by nearly 6% next year, with the funding already included in next year's total budget, benefiting approximately 550,000 retirees. In response, Executive Yuan spokesperson Lee Hui-chih did not confirm specific figures, only stating that the government announced salary increase measures in July and last year approved a 50% increase in military duty allowances and a 140% increase in combat unit allowances. The Examination Yuan added that whether the monthly retirement pensions for retired civil servants and teachers will be adjusted depends on whether this year's CPI, to be announced early next year, reaches the 5% threshold and the actual inflation rate.

Must pensions be increased if the price index meets the threshold? Lee Lai-hsi analyzes the pension adjustment mechanism.

Regarding the mechanism for adjusting monthly retirement pensions, Lee Lai-hsi, former chairman of the National Civil Servants Association, pointed out that last year's passed pension reform law clearly stipulates that military and civil servant monthly pensions must be adjusted in line with CPI. If the cumulative CPI increase exceeds 5%, adjustments must be made accurately, and the Executive Yuan must legally allocate the budget without discretion. He personally estimates that the adjustment rate will be slightly higher than 6%.

Regarding police and firefighters seeking to raise their retirement benefit replacement rates, Lee Lai-hsi analyzed that this would indeed increase budget expenditures and must be funded by the National Police Agency. However, he also noted that during the pandemic, medical personnel in public hospitals also faced dangerous environments, and hazardous conditions should be addressed by increasing allowances. Since everyone paid the same contribution rate, the same replacement rate should apply uniformly. Therefore, he advocates for the complete abolition of the current 10-year phased reduction mechanism for civil servants' retirement benefit replacement rates.