CABINET NOD:
The proposal would open up participation in voluntary contributions and allow people to transfer old-system retirement benefits new system accounts
By Chung Li-hua / Staff reporter
The Executive Yuan yesterday approved a plan to allow people using the old labor pension system to voluntarily contribute to their retirement savings and transfer funds into individual accounts under the new system.
People covered by the old system who meet retirement eligibility requirements would be allowed to voluntarily contribute to their retirement funds, the Cabinet said, adding that they can — by mutual agreement with their employers — opt to settle their old-system pension benefits early.
The measure is expected to take effect as early as the end of this month, it said.
Photo: Chung Li-hua, Taipei Times
Since July 2005, when the new labor pension fund was launched, through the end of last year, the fund has posted an annualized return of 7.64 percent, with annual returns exceeding 15 percent in each of the past two years.
Minister of Labor Hung Sun-han (洪申翰) said that in the past few years, many workers and labor unions have repeatedly urged the Ministry of Labor to allow those still under the “old system only” to make voluntary contributions to the new labor pension scheme so they can benefit from its returns and profit-sharing, and improve their retirement protection.
The proposal has two parts, with the first to open up participation in voluntary contributions under the new system to people covered only by the old scheme, Hung said, adding that about 115,000 people are expected to benefit from the change.
Once the policy takes effect, those eligible would be able to notify their employers that they want to make voluntary pension contributions, he said.
Employers would report those requests to the Bureau of Labor Insurance, which would open individual pension accounts, he said.
After the accounts are set up, employers would deduct the contributions directly from workers’ wages and remit them to their accounts, Hung said.
The second part of the proposal would allow people covered only by the old system who have already opted to make voluntary contributions and meet retirement eligibility requirements to, after contributing, transfer their accrued old-system retirement benefits through mutual agreement between employers and employees into individual accounts under the new system, Hung said.
That would enable workers to take part in the investment management of the new pension fund, he said, adding that about 102,000 people are expected to benefit from the measure.
The plan is not intended to encourage early retirement, but to provide people with more comprehensive labor protection, Hung said.
Moreover, it does not move people covered under the old system into the new system — meaning the changes would be to the Enforcement Rules of the Labor Pension Act (勞工退休金條例施行細則), not the Labor Pension Act (勞工退休金條例) — so no legislative amendments are required, he said.