EQUITY ON OLD-AGE BENEFIT SYSTEM: COMPARISONS OF IRR AND MULTIPLIERS ACROSS CIVIL SERVANTS’ GENERATIONS

The recent development of Taiwan Pension Reform has primarily targeted the issues of intergenerational equity. This paper focuses on the empirical analysis of equity within the civil servants, old-age income system, and conducts comparisons for four generations of cohorts whose service years started...

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Bibliographic Details
Published in:Táiwān jīngjì yùcè yǔ zhèngcè 2017-10, Vol.48 (1), p.75-103
Main Authors: Shao, Ai-Ju, Fu, Tsung-Hsi
Format: Article
Language:Chinese
Subjects:
Civil service
Domestic service
Generations
Pensions
Reforms
Studies
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Summary:The recent development of Taiwan Pension Reform has primarily targeted the issues of intergenerational equity. This paper focuses on the empirical analysis of equity within the civil servants, old-age income system, and conducts comparisons for four generations of cohorts whose service years started in 1971, 1981, 1991 and 2001 respectively. This study shows that multipliers of benefits to contribution vary across generations, ranging from 11 to 38; the earlier into the system, the higher the multiplier. Internal rates of return, which are derived in the range of 11.0%to 23.3%, display a similar pattern,which is the earlier into the system, the higher the IRR. These findings pinpoint the controversial issues back to the 1995 reform which was biased in favor of those who entered the public sector prior to 1995 and accordingly deteriorated the system's financial strength. In summary, though the young generation pays more into the system, the benefits received among different cohorts all reflect a high level in
ISSN:1729-8849
1729-9241