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Committee to supervise labor pension fund set-up

The Labor Pension Fund Super-visory Committee, an organization tasked with managing the nation's NT$600 billion (US$18.2 billion) labor pension fund, was established yesterday.

Huang Chao-hsi (黃肇熙), former secretary of the Council of Economic Planning and Development, and Lee Ruey-ji (李瑞珠), former division director of Bureau of Labor Insurance, were appointed the committee chairman and vice chairman respectively.

A ceremony was held yesterday morning to unveil the plaque bearing the committee's official title. It was attended by President Chen Shui-bian (陳水扁), Premier Chang Chun-hsiung (張俊雄) and Council of Labor Affairs (CLA) Minister Lu Tien-ling (盧天麟).

Chen said the formation of the committee marked the completion of the nation's Labor Insurance reform.

Chen denied in his speech that the committee had been created to give an advantage to the ruling party before the elections.

"Not everything is about the elections," he said. "The government needs to continue its operations even without elections."

Chen said the nation's employees could not afford to see delays in the establishment of the committee. He said that after it was invested in the stock market, the profitability of the National Stabilization Fund had grown 40 percent in the first quarter of this year.

Approximately NT$240 billion from the labor pension fund was appropriated for investment in the stock market, which had the same profitability as the National Stabilization Fund. An additional NT$96 billion in revenue will therefore be generated, he said.

Chang said that the manner in which the committee manages this tremendous amount of money would affect life after retirement for all the nation's workers.

He said that the value of the pension fund under the old and new pension schemes was expected to exceed NT$1 trillion 10 years from now. Given this amount, the committee carries a great responsibility to supervise it, he said.

Lu said that former CLA minister Lee Ying-yuan (李應元) has already indicated that a 1 percent increase in profitability now meant an additional NT$5,500 per month in income after retirement.

Lu said the policy was supported by a majority of workers and employers, adding that 90 percent of the nation's business units had begun using the new pension scheme, which requires employers to put an additional amount equivalent to 6 percent of an employee's salary into his retirement fund account.

Meanwhile, 77 percent of the employees to whom the Basic Labor Act (勞基法) applies have voluntarily begun to allocate money toward the same pension account from their salary.
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