The percentage of pension contributions made by employers should be increased to reflect their increasing share of the national income, Taiwan Higher Education Union members said yesterday, as they also called for pension reforms to include a crackdown on employers who fail to make required contributions.
“Capitalists should be obliged to bear the burden of the challenges faced by the Labor Insurance Fund (勞保基金),” Taiwan Higher Education Union director Liou You-syue (劉侑學) said.
The most basic of several labor insurance and pension funds, the fund is forecast to begin running a deficit in 2018 and use up its funds by 2027 as the nation’s population ages.
Employers are currently responsible for 70 percent of contributions to the fund, which are calculated based on workers’ salaries, while employees are responsible for 20 percent and the government for 10 percent.
Liou, who represents the union at meetings of the Presidential Office’s Pension Reform Committee, criticized calls for benefit cuts for workers, saying that benefits were already often too low to guarantee the basic living expenses for older people.
“In the past, both workers and employers have benefited from overly low contribution assessment rates, but now that there is a crisis, some people seem to expect only workers to foot the bill,” he said, calling for rate increases to cover the fund’s expenses.
The Ministry of Labor and Bureau of Labor Insurance should also increase investigations to enforce full contribution of payments, he said, adding that the average reported monthly salaries for people contributing to the fund was about NT$29,000, almost NT$10,000 less than the average national monthly salary for the industrial and service workers who comprise its primary contributors.
“Illegal behavior by employers is a very important factor behind the crisis faced by the Labor Insurance Fund, whether it is underreporting salaries or simply not paying into the fund at all,” union researcher Chen Po-chien (陳柏謙) said.
“In some cases, employers also refuse to give workers overtime pay, or else omit overtime pay from the salaries they report. All of this behavior is responsible for a significant shortfall in money received by the fund,” he said.
Chen added that a greater corporate burden for contributions to the fund was also warranted by a steady increase in the corporate share of GDP over the past 20 years, with corporate profits’ share of GDP increasing by 4.8 percentage points even as the share of salaries decreased by 7.1 percentage points.
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