Sat, Dec 30, 2006 - Page 2 News List

Meeting debates changes to labor pension scheme

STANDOFF A CLA official said the fines on employers who fail to pay pension insurance are onerous, while labor groups say this is the reason the scheme is popular

By Angelica Oung  /  STAFF REPORTER

Legislators, labor leaders and representatives from the Council of Labor Affairs (CLA) met yesterday to discuss the council's proposals to reform the Statute Governing Labor Pension (勞工退休金條例).

The reform measures include lowering the heavy fines currently levied on employers who default on labor pension payments and encouraging retirees to opt for monthly payments rather than a lump sum.

According to the CLA representatives, the measures will help Taiwan's labor pension system function more efficiently and effectively, but labor leaders and some legislators are calling the reforms possible land mines for labor interests. There were cries from the margins of the meeting that the council should be renamed the "Council of Capitalist Affairs."

"The goal is to create a win-win situation for labor and capital," said the deputy director of the council's Department of Labor Standards, Wang Chien-hung (王建宏), at the event yesterday hosted by Chinese Nationalist Party (KMT) Legislator Lin Cheng-fong (林正峰). "If businesses are forced to shut down because of disproportionate fines, nobody benefits."

According to Wang, the fines given to employers who fail to pay labor insurance, which start at 3 percent of the owed amount every day, are onerous and too severe given the infringement.

The CLA wants to bring the fines down in line with fines for defaulting on national health insurance payments or labor insurance -- 0.2 percent or 0.1 percent of the amount owed per day -- and to cap the total fine at 30 percent of the amount owed.

"Labor pension payments are different because if the owners don't pay, the workers don't get their benefits," Huang Yin-hua (黃英華), the executive secretary of the Taoyuan County Union, told the Taipei Times when asked to justify why the fines for defaulting on labor pension payments should be so much higher.

"The CLA promised us we will get our pensions because there will be heavy and cumulative fines for owners who don't pay," she said. "This was how we were persuaded to get on board with the new labor pension system."

Huang characterized the move as a "bait-and-switch" trick and expressed fears that more companies would start to default if the rules are changed.

The CLA proposal to encourage more workers to take monthly payments instead of a lump sum upon retirement was also greeted with suspicion and a measure of hostility. Meng Ai-lun (孟藹倫), the director of the council's Department of Labor Insurance, said monthly payments adjusted to the consumer price index offer retirees greater security against unexpected events such as inflation or con-artists who target the elderly.

"We're not against monthly payments in principle," Huang said. "But it's being used as yet another excuse to shrink benefits. Also, people don't trust the government to keep up with payments forever. They would rather have the money in their pocket."

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