The pension systems in Taiwan have been facing a tremendous restructuring. In this paper, we discuss first the basic theories and hypothesis regarding the formation of a pension system, and then introduce the international, especially the United States, recent revolutions of the pension system including both of the private and the public sectors. Finally, some of the possible trends of the Taiwan public pension system including a DC plan complemented with an IRA and a Cash Balance Plan are discussed.The Taiwan public pension plan will inevitably be facing to be put into a discussion that whether a change to DC plan or any other DC-like plan is necessary. We start from analyzing the background and the possible impacts from the Taiwan new labor pension system which is going to be a DC plan and will be effective since this 1st July. The other most important factors which are going to affect the future of the Taiwan public pension system are the IBM's decision to close its Cash Balance Plan and offer new employees only a 401(k) plan since this year and the California Gov. Arnold Schwarzengger's plan to force all new public employees to join defined contribution plans.If the change of the Taiwan public pension system is inevitable, then three basic rules in the process of transformation must be mentioned: (1) the new system is applied only for the new employees, (2) the existing employees are free to elect the new one or keep staying in the old system, and (3) the change should be moderate and without too much harm to either employer or employees.