The Executive Yuan has approved a package of draft amendments to the Labor Insurance Law (勞工保險條例) which, if enacted, would transform the labor pension system from the current lump-sum retirement cash payment to a regular monthly payment, an official said yesterday.
Under the amendment package proposed by the Council of Labor Affairs, workers who have contributed to the country's labor insurance program for 15 years or more would be considered eligible to receive a monthly payment of at least NT$3,000 after they retire at the age of 60.
Minister without Portfolio Lin Wan-yi (
"Both of the draft bills will be referred to the Legislative Yuan soon for deliberation and approval," Lin said, adding that the government will promote the two systems simultaneously and tie them to facilitating care for wage earners and the disadvantaged.
He said the new labor pension payment scheme could be implemented in 2009 and benefit more than 8.66 million insured wage earners.
Twice the support
Lin said that the total monthly payment pension scheme for retirees, would, over time, be able to provide twice the amount of support offered by a lump-sum payment.
Those who join the labor insurance program before the monthly payment system is in place would be allowed to choose either the existing lump-sum payment scheme or opt for the new monthly payment scheme, he said, adding that those who join the labor insurance program after the new system comes into force would only be able to receive monthly payments.
Under the draft amendment package, the monthly premium would be calculated at 6.5 percent of an employee's monthly salary for the first two years the scheme is implementation.
The premium would increase 0.5 percent every two years thereafter until an 11 percent ceiling was 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.
One of two formulas could determine the amount of the monthly payments, Lin said.
The first formula provides 0.55 percent of a worker's average monthly salary multiplied by the total number of years insured, plus an additional NT$3,000.
The second formula provides 1.1 percent of a worker's average monthly salary multiplied by the total number of years insured.
An insured worker would be guaranteed a minimum payment of NT$3,000 each month regardless of which formula was chosen, Lin said.
Insured workers with fewer insured years would be better off if the first formula, were adopted, while those with more insured years would find the second formula more favorable, he said.
To encourage people to work longer, Lin said, the draft amendments propose that an additional 4 percent of the total amount calculated under either formula would be paid for each year the insured worker postponed his or her retirement, up to an additional 20 percent.
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