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Extra retirement cash proposed for long-term workers

Workers who have contributed to the nation's labor insurance scheme for more than 15 years could be eligible to receive a monthly payment of at least NT$3,000 (US$91) when they retire at the age of 60, if an amendment proposed by the Cabinet is passed.

Monthly payments from the labor insurance fund after retirement would take effect if an amendment to the Labor Insurance Act (勞工保險條例) is approved by the legislature.

"This [amendment] is actually related to the proposed national pension law that we introduced last week," Cabinet spokeswoman Chen Mei-ling (陳美伶) said on Wednesday.

The amendment would become effective in 2009 if the legislature approves it, she added.

Under the draft legislation, the monthly premium will be calculated at 6.5 percent of the employee's monthly salary in the first year of retirement. In the second year, the rate increases to 7 percent, with a further increase of 0.5 percent every two years after that until the ceiling of 11 percent is reached.

Workers who pay monthly premiums for more than 15 years would be entitled to receive monthly payments upon retirement at the age of 60 under the proposed amendment.

For monthly payments, one of two formulas will be used.

The first formula is 0.55 percent of average monthly salary multiplied by the total number of insured years, plus NT$3,000.

The second formula is 1.1 percent of average monthly salary multiplied by the total number of insured years.

An insured worker would be guaranteed a minimum payment of NT$3,000 a month regardless of which formula is chosen.

To encourage people to work longer, the draft legislation also proposes an additional 4 percent of the total amount calculated using either formula will be paid for each year the insured employee postpones his retirement, up to a ceiling of an additional 20 percent.
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