The Council of Labor Affairs yesterday completed a draft amendment to the Labor Insurance Act (勞工保險條例) introducing monthly pension payments in most cases instead of lump-sum payouts, saying that it hopes to bring the change into effect next July, along with the Ministry of the Interior's national pension annuity program (國民年金).
President Chen Shui-bian pledged while campaigning for the presidency that the nation's pension system would be overhauled to maximize the number of recipients and ensure that most received a monthly payment.
The current Labor Insurance Act provides a single lump-sum pension payout for the insured for a minimum of one year for those who retire by the age of 60 for men, or 55 for women. The payout consists of their average monthly salary for the period insured, multiplied by the number of years insured.
The draft amendment would entitle those insured under labor insurance for at least 20 years and who retire at or after the age of 60, to monthly pension payments at 1 percent of their monthly salary multiplied by the number of years insured.
Workers insured for over 20 years, who continue to work after the age of 60, would be entitled to at least 4 percent of their monthly salary, while the percentage would be increased progressively on that basis for years worked after 60.
Workers who retire at 60 but have been insured for less than 20 years would receive a single lump-sum payment of their average monthly salary multiplied by the number of years insured.
The percentage rates would be adjusted every three years after the plan takes effect.
The Cabinet submitted to the legislature in June a draft proposal for a national pension annuity to cover people, such as freelance workers, housewives and many businessmen not covered by existing labor insurance, military insurance and civil servant insurance.
1. Those insured for at least 20 years and who retire at or after 60, to monthly pension payments at 1 percent of their monthly salary multiplied by the number of years insured.
2. Those insured for over 20 years, who continue to work after 60, would be entitled to at least 4 percent of their monthly salary, while the percentage would be increased progressively on that basis for years worked after 60.
3. Workers who retire at 60 but have been insured for less than 20 years would receive a single lump-sum payment of their average monthly salary multiplied by the number of years insured.
The draft amendment is to be submitted to the Executive Yuan in the coming weeks. It will affect some 8 million workers.
RSS