臺大管理論叢 NTU Management Review VOL.29 NO.2

Introduction to Special Issue Pension Policy: Design, Management and Reform Guest Editors Fen-Ling Chen , Professor, Department of Social Work, National Taipei University San-Lin Chung , Professor, Department of Finance, National Taiwan University Shih-Jiunn Shi , Professor, Graduate Institute of National Development, National Taiwan University Sharon S. Yang , Professor, Department of Finance, National Central University Due to population aging, low fertility rate and severe underfunding of pension funds, public defined benefits pension systems in Taiwan face severe challenges recently. To respond to these challenges, Taiwan government has called for pension reform meetings and implemented some policy changes since 2016. On the other hand, many Taiwan scholars have also written papers to suggest possible pension reform solutions and investigate the effects of pension reform. To bridge the gap and disagreements between academics, practitioners, and government, this special issue is devoted to pension policy, including its design, management and reform. There are six papers included in this special issue. Three of them propose and discuss pension reform policies. The first article by Chen and Chung proposes an adjustment formula for calculating the worker’s average salary, which is then utilized to determine the old-age benefits. In the recent pension reform draft of the Labor Insurance Act in Taiwan, proposed by the Ministry of Labor, the average salary is simply the average of the highest 180 months of insured wages. In contrast to the simple average, the proposed adjustment formula embeds a dynamic adjustment linked to the latest national average monthly salary and thus can improve gender equality. Moreover, based on the proposed average salary formula, the authors also discuss how to determine the old-age benefits and the long-run relationship between pension insurance premium and retirement benefits for a financially stable pension system. Finally, they suggest how to apply the proposed benefits formula to set up a financially feasible retirement payment formula that allows a minimum pension payment.