The government will not hesitate to act if the new labor insurance pension system goes in the red 19 years from now, Council of Labor Affairs (CLA) Minister Wang Ju-hsuan (王如玄) said.
“It is just conjecture that the labor pension fund risks incurring debts 19 years after the system takes effect,” said Wang on Friday.
Noting that the assumption was based on hypothetical scenarios — such as up to 80 percent of wage earners choosing to receive monthly pension payments and the pension fund’s return on investment being 4 percent or less — Wang said this depressing forecast might not necessarily be correct.
“There are many variables to decide the future of the labor pension fund, so we need not be too pessimistic,” Wang said, adding that if the fund did begins to incur deficits, the government would enact bailout measures.
Wang’s assurances came after the Legislative Yuan approved a package of amendments to the Labor Insurance Act (勞工保險條例) that will allow the country’s 8 million-plus wage earners to receive pension payments in monthly installments rather than in one lump sum.
Under the existing system, retired wage earners can only receive their pension in a lump sum, the value of which risks being eaten up by inflation and failed investment.
The new system, which will come into force on Jan. 1, will permit retired workers from the age of 60 on to choose to collect their pension in a lump sum or to receive monthly payouts until death.
Wang encouraged wage earners to choose the monthly payout system, which she said would benefit pensioners far more than the lump sum alternative.
“For pensioners who opt for monthly payments, the amount they receive after eight years and one month will outstrip the amount they receive in one lump sum,” Wang said, adding that if a pensioner died and the accumulated monthly amount received is lower than the lump sum, the surviving family would be given the difference.
Also, the insurance premium rate would be raised from the current 6.5 percent to 7.5 percent initially, increasing year by year to a maximum of 13 percent by 2027.
Pensioners opting for monthly payouts will receive an amount equaling the number of years they have participated in the labor insurance system times their monthly salary (calculated by taking the average of a worker’s 60 highest monthly salaries) times the income substitution factor of 1.55 percent.
A retired worker with a monthly insured wage of NT$43,900 would be entitled to receive a pension of NT$20,414 per month after being in the system for 30 years.
Stressing that the main purpose of the new system was to enable workers to lead dignified lives after retiring, Wang said the increase in the premium rate was necessary.
Typhoon Champi is forecast to turn northward earlier than previously expected, sparing Taiwan a direct hit but still bringing heavy rain to the north of the country on Friday and Saturday, the Central Weather Administration (CWA) said yesterday. Typhoon Champi had strengthened and increased in size over the past 12 hours, and as of yesterday afternoon, was packing sustained winds of 198kph near its center, CWA forecaster Cheng Chieh-jen (鄭傑仁) said. However, due to the weakening of a Pacific high-pressure system the storm is now expected to turn northward earlier than initially forecast, likely around Japan’s Ishigaki Island, Cheng said. As Champi brushes
A sea warning for Typhoon Champi might be issued tonight, while the storm’s trajectory would determine whether a land warning is to be issued tomorrow night, the Central Weather Administration (CWA) said yesterday. As of 2pm yesterday, Champi was about 1,536km east-southeast of Taiwan proper’s southernmost point, Oluanpi (鵝鑾鼻), packing maximum sustained winds of 198kph, CWA forecaster Tseng Chao-cheng (曾昭誠) said. The storm was moving west-northwest at 23kph and was expected to strengthen over the next 24 hours before weakening slightly as it approaches cooler waters east of Taiwan, Tseng said. Champi is expected to turn north tomorrow, with the angle of the
DEFENSE PROCUREMENT: Taiwan could become the largest operator of V-BAT drones outside the US if the contract is finalized, the Ministry of National Defense said The navy and the coast guard reportedly plan to acquire 292 units of MQ-35A V-BAT vertical takeoff and landing (VTOL) surveillance drones. The Navy said it would procure the drones through an open bidding process. If the contract is awarded and finalized, it would make Taiwan one of the largest buyers of the uncrewed aerial vehicle (UAV) developed by the US-based defense technology company Shield AI. The Coast Guard Administration budgeted NT$1.2 billion (US$37.1 million) to buy 12 drones, which have been delivered, Shield AI said in a report on Oct 13. The navy is planning to spend NT$36 billion under
A patrol vessel donated by the Coast Guard Administration (CGA) to the Philippines would not be used in waters near Taiwan or areas where Taiwanese fishing vessels operate, Premier Cho Jung-tai (卓榮泰) said yesterday. The vessel, formerly the CGA's 500-tonne-class Kinmen (金門), was commissioned into the Philippine Coast Guard on Oct. 2. Speaking at the Legislative Yuan, Cho said the Philippines had pledged during the donation process that the vessel would be used only for designated missions and would not operate in waters related to Taiwan. The vessel could even provide assistance to Taiwan if needed, he added. Responding to questions from Chinese
RSS