Will Military, Civil Servants' and Teachers' Pension Arrears from 2 Years Be Recovered? Lee Lai-hsi Proposes Adjustment of Retirement Allowance: The Situation of 'Livelihood Funds' Is Not Optimistic

The military, civil servants, and teachers' pension reform (pension reform) began in 2018 and has now spanned eight years. A major turning point came in 2025 when the 'pension cut freeze' bill passed, marking a significant shift. The revised law is expected to result in back payments of pension arrears for approximately 180,000 retired military personnel, civil servants, and teachers, with disbursements scheduled for August 1, 2025.

Lee Lai-hsi, former chairman of the National Public Servants Association, recently confirmed on Facebook that the pension arrears for January to July 2025 have finally been credited. On August 19, he posted a photo from a dinner gathering with retired public educators on the Qixi Festival (Chinese Valentine's Day). While acknowledging that the halt to annual pension reductions marks progress, he emphasized that the 'livelihood funds' for 2024 and 2025—essential retirement income—have still not been recovered. He noted that administrative reviews and appeals are ongoing but assessed the situation as 'not optimistic,' suggesting that a political resolution may ultimately be necessary.

Moreover, Lee pointed out that the adjustment amount for pensions in 2027, intended to respond to inflation, remains unclear. He explained that since the 2018 pension reform, the replacement rate has decreased by 1.5% annually. Before the amendment, a cumulative 6% reduction occurred over four years. As retirees grow older and become more dependent on pensions, a policy that results in monthly payments shrinking 'violates human nature' and must be corrected.

Lee stressed that their demands are modest. While the initial 'one-time cut' in the pension reform may have been unavoidable, the annual reduction in the replacement rate must be stopped and restored. He called for returning 'legally entitled income' to retired military, civil servants, and educators, describing this as their 'Qixi Festival wish.'

Although the arrears for January to July 2025 have been paid, the over-deducted amounts from 2024 and 2025 remain unresolved. Lee has proposed ending the 10-year policy of gradually reducing the replacement rate as the next step. In another post, he warned that if the 2024 and 2025 pension arrears are not promptly reimbursed, 'tragedy may repeat itself,' asking policymakers, 'When you wake up at midnight, can your conscience rest easy?'

Reviewing the pension reform timeline, the reform was initiated in 2017 and officially implemented on July 1, 2018. The replacement rate for public servants and educators was set to decline annually from a peak of 75% to 60% by 2025, at a rate of 1.5% per year. However, at the end of 2025, the Legislative Yuan passed amendments to the 'Civil Servants Retirement, Dismissal, and Pension Act' and the 'Public School Staff Retirement, Dismissal, and Pension Regulations.' These amendments halted the decline in pension replacement rates and standardized calculations based on the 2023 level.

The revised law took effect after being announced by the Presidential Office. Although the government has petitioned the Constitutional Court for review, and a ruling has not yet been issued, the Ministry of Civil Service has already begun disbursing recalculated pension arrears. Presidential Office spokesperson Li Hui-chih stated that while they respect the authority of the Examination Yuan and disbursement agencies, the amendment 'indeed increases government fiscal expenditure,' and they continue to hope the Constitutional Court will issue a ruling promptly.