Empirical Study on Taiwan’s Social Security System─Analyzing the Effects of Wealth Redistribution

Abstract

The "National Annuity" has begun operation last year in Taiwan. The plan will be integrate into the current social security and insurance schemes forming a complete social security system. This report focus on the protection effects it has on the elderly and economically weakened, demonstration of calculation on insurance benefits gained based on different age groups of participants, and analysis on whether the "National Annuity" could actually protect the socially weakened and fulfill the function of "wealth redistribution". This report shows the immediate annuity payment to the disabled has a practical security effect. However, to the general public, due to the effect of "high income, high life expectancy," the "wealth redistribution" effect will be entirely dismissed. In addition, the implementation of "National Annuity" will only be an advantage to the existing senior participants, while it cannot generate much protection for the new generation of citizens. The volatility of interest rate will be the major element affecting the future outcome of the "National Annuity". We suggest "National Annuity" to strengthen the restriction on qualification of annuity receivers or rate variation in order to utilize social security resource more efficiently and benefit more people.