The investment committee that overseas the Labor Insurance Fund plans to turn over a portion of the fund's assets to private equity managers.
Within three months, NT$24.5 billion of the fund -- which is overseen by the Council of Labor Affairs -- is expected to be privately managed, officials said yesterday.
The move follows a similar announcement last week from the Ministry of Transportation and Communications, which said it would turn over its Postal Savings Fund (郵儲基金) to outside managers.
The NT$24.5 billion sum is roughly 5 percent of labor fund's NT$490 billion in assets.
The new policy is expected to benefit securities companies that offer discretionary managed account services, as they would be paid a fee for overseeing part of the fund's assets.
Because private money managers do not guarantee a return on their clients' investment, labor council officials hope to park some of the fund's assets into investments that earn a fixed rate of return.
During the annual budget review for the Labor Insurance Bureau at the Legislative Yuan on Monday, legislators asked pointed questions about the fund's poor performance in recent months.
Hsu Shu-po (許舒博), a KMT legislator, alleged that the Labor Insurance Fund had been manipulated by non-professionals.
"If the Council of Labor Affairs has claimed that the supervisory committee of the Labor Insurance Fund is run by professionals ... then why does the council wish to entrust part of its funds to outside fund companies?" Hsu said.
Chen Chu, (陳菊), chairwoman of the Council of Labor Affairs, said the idea was to improve the fund's overall performance. "The council [is to] look for investment trust companies with a strong track record," she said. "Several qualified fund companies will be chosen to manage the fund."
"If their performance proves to be good, in the future we might entrust 20 percent of the fund -- the fund's ceiling for investment in stocks -- to outside professionals."
RSS