1. National Pension 95208020 田鵑華 95208040 陳芷羚 95208045 蕭伊伶 95208049 劉佩琪 95208051 陳善平 95208055 蔡曜蓮 95208058 林昕儀 95208063 黃詩芸 95208096 吳亭穎

2. National Pension 1.Introduction 2.Comparison –Japan –German –Sweden 3.The Problems and Solutions of Taiwan’s Pension System

3. Introduction

4. Introduction to National Pension 1.Purpose 2.Extra Effects 3.Reasons 4.The Insured 5.Insurance Premium –Calculation Method A –Calculation Method B 6.Risks

5. The Purpose of National Pension 1.To implement the national insurance system 2.For our aging society

6. Extra Effects of National Pension 1.To stop candidates from making empty promises of more allowances 2.To integrate Old-Age Citizens' Welfare Allowance, Old-Age Indigenes' Welfare Allowance, Old-Age Farmers' Welfare Allowance, etc

7. Reasons to Enforce Pension System 1.To avoid the problems caused by paying all premium at a time, which may make money used inappropriately 2.The amount of premium can be adjusted with inflation rate and earned-income rate, which can avoid it being affected by inflation

8. The Insured 1.Age :25~65 2.Residency : over 25 years with their household registered in R.O.C., 3. Without other pension systems (labor insurance, farmer's health insurance, government employee's insurance…) Main target ： students, housewives, the unemployed, the self-employed, etc

9. Insurance Premium 1.Monthly insured amount 2.6.5% of minimum wage ($17,280) for the first and the second year (the government afford 40%, and the insured afford 60%)  $17,280*6.5%*60%=$674(per month) 3.After that, the rate will be adjusted according to the result of calculating carefully. The limit of it is 12%.

10. Identities of the Insured The ratio of the amount paid by the insured themselves The ratio of the amount paid by the government General people60% ($674)40% ($449) Low-income family0100% ($1,123) whose incomes do not reach the standard 1.5 times less than the living expenses in that year 30% ($337)70% ($786) 1.5 times more but 2 times less than the living expenses in that year 45% ($505)55% ($618) The disabled serious$0100% ($1,123) between serious and slight 30% ($337)70% ($786) slight45% ($505)55% ($618)

11. Payment of Old-age Pension Benefit 1.Method A ＝（ Monthly Insured Amount × Insurance coverage year ×0.65% ） +3,000 (suitable for those who are between 24 and 64 years old, unable to pay the premium for 40years) 2.Example: a 40-year-old man has to pay the premium for 25 years so that he totally afford more than $290,000; however, after 65 years old, he can get $5,808 per month.  $17,280*0.0065*25+$3,000 = 5,808

12. Payment of Old-age Pension Benefit 1.Method B ＝ (Monthly Insured Amount × Insurance coverage year × 1.3%) (suitable for those who are under 24 years old, able to pay the premium over 40years) 2.Example: a 25-year-old man has to pay $515,082 within 40 years, and after 65 years old, he can get $8,986 per month. If he can live to 82 years old (Taiwanese life expectancy), he can get $1,833,062 totally.  17,280*0.013*40 = $8,986

13. Risks to the Insured of National Pension 1.The uncertainties --- the insured are not sure how much they can totally get in the end 2.Example: –Lee had paid the premium $515,082 in total for 40 years, but he died after having his national pension $8,986 for the first month. –His family got funeral benefit $86,400 and had survivor’s pension payment $4,493 for a month only because of losing the qualification (his spouse married another man). –Therefore, he and his family totally got  $86,400 + $8,986 + $4,493 = $99,879 –He paid $515,040 but only got 99,879 back. –To sum up, he lost $400,000, and that was about 80% of the amount he paid.

14. Japan

15. 1.Introduction of Pension System 2.Benefit 3.Problem 4.Reform

16. Pension System

17. Benefits 1.Old-age Basic Pension 2.Disability Basic Pension 3.Survivors’ Basic Pension 4.Widow’s Pension 5.Lump-sum Death Benefit

18. Problem 1.Silver century (low birth rates & aging population) 2.Foreigners benefit

19. Reform 1.Increase tax rate 2.Change the benefit formula

20. The German Pension System

21. German Introduction Feature Problems Today Action Taken

22. Introduction 1.The first formal pension system in 1889 2.Retirement insurance 3.Pay-as-you-go system

23. Feature 1.Most generous system → High replacement rate: 70% (U.S: 53%) 2.Largest item in the social budget 21% of public spending 11.8% of GDP

25. Problems Today 1.Low birth rate: 1.4 births per woman 2.Aging population (2050: worker: pensioner ratio = 2:1, today 5:4) 3.Early commence of retirement 4.Increasing of unemployment

26. Action taken 1.Age of retirement: 67 2.Increase contribution 3.Decrease the replacement rate 4.Private pension

27. The Swedish Old-Age Pension System

28. Sweden 1.The Pension System Comprises of three Parts 2.Two Necessary Conditions 3.Current Challenges

29. 1.Guarantee pension -For those who have a low or no income. 2.Income pension -16 % of the pensionable income 3.Premium pension -2.5 % of the pensionable income The Pension System Comprises of Three Parts

30. Two Necessary Conditions 1.Stable economic growth rate -3% at least 2.High tax rate

31. Erik Norrman - School of Economics and Management

32. Social security Indirect taxes Direct taxes Taxes in percent of GDP

33. Current Challenges 1.Discourage work incentives 2.The impact of aging population 3.The financial stability

34. Lurking Problems and Countermeasure

35. 1.Aging Society –Data –Difficulties –Solutions 2.Foreigners Benefit 3.Financial source 4.Payment System 5.Declining Labor Force Participation Lurking Problems and C ountermeasure

36. Aging Society-Data Country Over the age 65 arrived at the ratio of the population The required number of years 7%10%14%20%30%7%-14%10%-20%20%-30% USA1942197220152034 － 7362 － Germany19321952197220092036405727 UK1929194619752026 － 4680 － France1864194319792020 － 11577 － Italy1927196619882007 － 614129 Japan19701985199420052024242019 Taiwan19932005201720252040242015 Korea20002007201720262040171914 Singapore20002010201620232034161311

37. Aging Society-Difficulties 1.Rapid increase in pension payments 2.Aging population and poor adjust mechanism 3.Reducing pension payments due to the crisis of pension hollowing out

38. Aging Society-Solutions 1.Promoting the employment of the aged and enhancing labor force participation rate of middle-aged 2.Rate adjustment mechanism to institutionalize 3.To strengthen the wishes of the people to pay (to join) of an annuity 4.Early planning of the government's financial source of funds

39. Foreigners Benefit 1.Difficulties 2.Solutions ： National Insurance Number

40. Financial Problems 1.High pension payment 2.Increase in non-wage labor costs

41. Countermeasure 1.Reduce subsidies paid by government 2.Increase individuals’ payment 3.Encourage individual’ savings 4.Cooperate with private pension system 5.To extend the retirement age

42. Payment System Problem: use nominal wages Solution: adjust to real wages

43. Declining Labor Force Participation Labor Force Participation of Taiwan (%) 計 199858.04 199957.93 200057.68 200157.23 200257.34 200357.34 200457.66 200557.78 200657.92 200758.25 200858.28

44. The End

45. Thank You for Listening