Taiwan's economy is weathering the economic storm, outperforming some of its regional counterparts on the back of reviving exports.
But with a rapidly ageing population, and with one of the lowest birthrates in the world, a crisis is looming in the shape of dire underfunding of its pensions system.
Unlike mainland China, Taiwan does not have a one-child policy of population control, but it appears that it does not need to.
The average replacement ratio to maintain population levels in industrialised countries is about 2.1 children, but in Taiwan last year, the total fertility rate- births per woman - was between 1.05 and 1.07, a slight rise from the all-time low of 0.895 in 2010, which was the lowest in the world.
While the total fertility rate is likely to increase this year - the Year of the Dragon in the Chinese zodiac is an auspicious year to have children, the number of births is still too low to help rejuvenate the populace.
The fertility rates of other countries in the region, such as Japan, Hong Kong and South Korea, have all increased over the past few years. Japan's total fertility rate rose from 1.26 in 2005 to 1.39 in 2010.
The impact of the greying population is already being felt.
Retired workers receive an income-replacement rate of 73.9 per cent in Taiwan, significantly higher than the 58 per cent average for the Organisation for Economic Cooperation and Development countries, but there are question marks over how long that kind of payout is sustainable.
Taiwan is struggling to deal with the looming bankruptcy of its pensions fund system. The Labour Insurance Fund, which collects contributions for retired workers' pensions, currently provides coverage for 9.81 million workers, with an estimated value of NT$530 billion (Dh66.78 billion), according to the Council of Labour Affairs (CLA).
Workers are required by law to pay into the fund.
However, the fund has notched up hidden debts of more than NT$7.3 trillion.
The CLA estimates that the insurance fund will begin to record a deficit in 2017, three years earlier than original projections, placing it on track to be bankrupt by 2027.
Unless something is done in the meantime, 7.5 million eligible people under the age of 50 this year will not be able to collect from the fund by the time they retire.
In all there are five government funds, including the Labour Pension Fund, the Civil Servants Pension Fund, the Postal Savings Fund, the Labour Insurance Fund and the National Pension Fund.
The major government funds incurred total losses of NT$89.8bn last year, according to an opposition legislator Ho Hsin-chun, and one of the plans mooted is to bring these all together into a single sovereign fund.
However, trade unions oppose other proposals to save the funds, such as increasing premiums, raising the retirement age or using a lower income-replacement rate.
"These might alleviate the risk of the fund going bankrupt in the long term, but it will harm the trust workers place in the reliability of the Labour Insurance Fund," said Hsieh Chuang-chih, the secretary general of the Confederation of Trade Unions. A recent survey shows that 60 per cent of Taiwanese believe they will not get their labour pension upon retirement, and many are opting to take their pension as a lump sum on retirement.
Nerves were rattled further after a fund manager at ING Securities Investment & Trust, the company appointed by the government to manage the Labour Insurance Fund, has been allegedly colluding with Ablerex Electronics, a company traded on Taiwan's over-the-counter market, racking up NT$210 million in losses.
ING agreed to pay $8.8m to the Taiwan government's labour and pension funds to compensate for investment losses related to the allegedly irregular trading activities.
The pensions crisis has also severely affected the fortunes of Taiwan's president, Ma Ying-jeou, who is in his second term after winning the leadership largely on a pro-business with China ticket.
Mr Ma has said the main problems were insufficient funding and unequal distribution of benefits among different professions and among different generations of people, and has offered to talk to the opposition Democratic Progressive Party about overhauling the system, something he said was "necessary and urgent".
"The work may be tough and complex, but we can no longer drag our feet because the flawed system could hurt our fiscal health and affect the well-being of public and private-sector employees and even the whole society," said Mr Ma.
