Taiwan's defence ministry admits pension maths shortchanged 18,000 military retirees

Taiwan's Ministry of National Defense (MND) said on Thursday, 15 October 2026, that a flaw in how it calculated pension cuts had taken more money than the law allows from more than 18,000 retired officers and non-commissioned officers, and that it would correct their payments and refund the shortfall on 1 November.

Major General Wu Hsing-hsien, deputy director of the ministry's Department of Resources Planning, presented the correction at the ministry's regular press briefing. Wu said retirees had recently complained that the yearly deductions taken from their retirement benefits had grown, and that after the responsible units reviewed the relevant rules and the calculation program, they confirmed that some people's deductions had been affected and had to be corrected.

The problem sits inside the 10-year phase-down created by the 2018 military pension reform. Under Article 26 of the Act of Military Service for Officers and Non-commissioned Officers of the Armed Forces, when a retiree's total benefits before the reform, made up of retirement pay, preferential savings interest and monthly compensation, exceed the pension calculated under the new baseline, the difference is cut in equal steps over 10 years.

Those cuts are taken first from the preferential savings interest. Once that interest rate has been brought down year by year to 6 percent, any remaining gap is taken from the retirement pay itself, Wu explained.

According to the ministry, the error appeared when retirement pay was raised by 2 percent on 1 July 2022 and by a further 4 percent on 1 January 2024. On both occasions the calculation did not take into account that part of the shortfall in savings interest had already been shifted onto retirement pay, so the deductions grew. Wu said at the briefing, as reported by Liberty Times, that the original formula had simply not allowed for this situation.

The sums involved are small for each person. The ministry's personnel staff office drew up the list of affected retirees and the amounts owed, and asked the two paying agencies, the Veterans Affairs Council and the Public Service Pension Fund Management Board, to verify them. Of the more than 18,000 people affected, over 99 percent are owed less than NT$1,000 and over 98 percent less than NT$500. The total comes to just over NT$5 million.

Because the correction does not require any change to the law, the ministry said it can complete the recalculation and the refunds on 1 November. Retirees do not need to apply: the Veterans Affairs Council and the pension fund board will pay the money automatically, which the ministry said was meant to protect the rights of its retired comrades.

The ministry said it had acted on complaints from retirees themselves, and that the full check of its records had put the number of people affected at a little over 18,000.