A committee tasked with managing the huge labor pension fund will begin operating on Tuesday, with about NT$120 billion (US$3.65 billion), or 20 percent of the fund, expected to be put into the local stock market, an official said yesterday.
The news was revealed by Council of Labor Affairs (CLA) Chairman Lu Tien-lin (
"The unveiling ceremony is scheduled for July 2, followed by the first board meeting. We hope the committee can put the funds in motion as soon as possible," Lu said.
estimate
According to an estimate by the CLA, local employers had deposited more than NT$172.2 billion into their employees' individual retirement accounts as of the end of last month. The portable pension system came into effect on July 1, 2005.
"Together with about NT$430 billion worth of funds stored in the old labor pension system, the total amount in the labor retirement fund has reached NT$600 billion," Lu said.
He added that the local stock market would be the main investment target of the funds.
While regulations have cap the committee's stock market investment to a maximum of 40 percent of the total amount, Lu said that the sum of money put into the market would not be greater than 20 percent.
increase
The CLA expected that the scope of the labor pension fund will increase to NT$1.13 trillion 10 years after the implementation of the portable pension system.
Lu said that the council, authorized by law to form the committee, had selected its 19 members and would soon announce its chairman and vice chairman.
Some portion of the labor pension funds would be invested in international stock markets and in other financial instruments, such as the local futures market and foreign currency deposits.
Lu said that opening the funds to diversified investment was expected to raise their annual returns to 4 percent from the current 2 percent from interest deposits at banks.
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