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Bureau of Labor Insurance, Ministry of Labor Brief Introduction

Taiwan is currently faced with the prospects of of labor insurance pension is 1.55%. Take an
decreasing childbirth, population aging, and insured person who has 30 insurance coverage
reducing household living resources; therefore, years for example : he/she will be eligible for an
how to enhance elderly economic security for income replacement rate as high as 46.5% upon
laborers has become an important issue. The retirement. Plus the income substitution rate
elderly economic security model includes three provided by the second level of labor pension,
levels. The first level is the basic public pension, the total income replacement rate has already
like the national pension and labor insurance exceeded the standard of 55% recommended by
pension programs, which belong to the social the International Labor Organization (ILO).
security system mandatorily implemented by
the country. The second level is the corporate Establishment of the Labor
pension, which is the pension given by employers Pension Program
to their employees, such as the old and new labor
pension programs. Both the corporate and public The Labor Pension Act (new program), which
pension programs have the effects of saving and was implemented on July 1, 2005, is supported
risk sharing. The third level is the commercial by two pillars of “individual labor pension
pension, which is the annuity insurance paid by accounts” and “annuity insurance”. All employers
individuals from private insurance companies. are required to contribute labor pension (at least
It primarily enables individuals to save for their 6% of employees' monthly wages) into individual
retirement to make up for the inadequacies of labor pension accounts and employees can
social insurance and corporate pension. After voluntarily deposit 6% (or less). Employees own
the new labor pension, national pension, and labor pension accounts; the coverage years and
labor insurance pension programs continued pension are cumulative, not affected by their
to be implemented, the framework of basic changing jobs or the closure of companies. The
economic security for laborers' elderly lives has features of the new labor pension program are as
been founded. Currently, the seniority pay rate follows :

Private commercial pension
personal savings

Corporate retirement pension：labor pension program
(The new labor pension program was implemented on
July 1, 2005)

Public pensions：national pension, labor insurance
pension

Chapter Four Safeguards for Laborers’ Old-Age Lives 33