Tue, Jun 24, 2008 - Page 8 News List

CLA must realize that workers are not ATMs

By Huang Yu-te 黃育德

The legislature’s assessment of the Labor Insurance annual pension plan has entered the stage of inter-party negotiation. The Council of Labor Affairs (CLA) has directed the focus on the financial situation of the Labor Insurance Fund (勞保基金), suggesting that the basic benefit rate should be linked to the rate of insurance contributions. If workers demanded a higher rate of benefits from their Labor Insurance pension, their rate of contribution would be raised. Media reports say the contribution rate could rise as high as 13 percent, so that a contribution of NT$1,300 would have to be made for every NT$10,000.

The council has warned that if changes to the plan are not passed and the contribution rate remains unchanged, the Labor Insurance Fund will go bankrupt. Council of Labor Affairs Minister Jennifer Wang (王如玄), however, has given her “guarantee” that as long as the contribution rate hike passes, she will not allow the fund to become bankrupt during her term, and no ruling party would dare allow that to occur. But according to council calculations, even if changes to the pension passes, the fund will go bankrupt within 20 years.

All 9 million workers who are legally required to participate in labor insurance have the right to claim their benefits in a single withdrawal.

If the council is correct, then this is tantamount to informing workers that regardless of whether they choose to withdraw their benefits as a single sum or to receive annual payments, they must make higher contributions to the fund — yet in the end, the fund will still go bankrupt, and when that happens, the contribution rate will have to be increased further.

While the government wants to implement systemic reform, they are forcing workers to choose a policy with no future prospects. How can workers have any confidence in changes to the Labor Insurance annual pension?

The tax season has just passed and workers undoubtedly did not escape a single cent of what they owed. Oil, water, electricity and commodity prices are all rising and there is no telling when this inflationary trend will end.

Also, the National Pension will begin in October and more than 3 million people will be required to make a monthly contribution of NT$674. Workers can barely keep on top of daily expenses.

There are also the problems of an aging population, lower birth rate, middle-age unemployment, employment instability and employers passing on the costs of the labor insurance pension and labor insurance premiums. For the next several generations, the burden on workers will grow, yet the CLA still plans to raise Labor Insurance contributions.

The Civil Servant Pension Fund (公教退撫基金), the Civil Servant Insurance (公教保險), the Farmers’ Insurance (農民保險) and the National Pension — also social insurances — have clear legal stipulations that the final responsibility of payment should be borne by the government, or that any deficit should be taken from central funding.

However, the government is proposing that the basic rate of labor insurance senior benefits be linked to the contribution rate, thus treating workers as ATMs. It is extremely unfair to make this demand of them.

The Labor Insurance Fund should follow the example of other retirement insurance schemes: Allow the central government to form annual public budgets to contribute to the fund while maintaining the contribution rate, thus keeping the burden on workers at a minimum. But whatever we do, we should not rely on Wang’s “guarantee.”

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