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Bureau of Labor Insurance, Ministry of Labor Brief Introduction
2. Labor Insurance Pension Will Gradually
Extend the Age of Retirement
One of the solutions adopted by many countries
around the world to ease the financial burden
of annuity insurance is to extend the average
retirement age. The labor insurance pension
program has designed to gradually extend the
retirement age. From the date the labor insurance
pension program was implemented, one year
shall be added on the 10th year, after which one
year will be added to the retirement age every
two years until the retirement age reaches 65.
3. Do Regular Research in Trends of
Labor Insurance and National Pension
Benefits
In the past, Taiwan's social insurance lacked a
rational rate adjustment mechanism, causing
issues of financial payment to worsen. In the
future, changes and trends in the payment of
benefits will be regularly calculated and evaluated
according to insured persons' actual claiming of
benefits to build a financial alarm system.
4. Strengthen the Management and
Operation of the Labor Insurance
and National Pension Fund; Stabilize
the Financial Foundations of these
Programs
In light of safety, profitability and liquidity, the
government strives for raising the return on
investment by strengthening the management
and operation of the labor insurance and
national pension fund and increasing investment
channels.
Labor Insurance Financial Crisis
and Pension System Reform
For many years, the premium rate for the labor
insurance program has been on the low side,
while the benefits have been relatively favorable.
Established for more than 69 years, the program
is now entering its maturity stage as claims
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for old age benefits continue to increase. The
system is therefore facing immense pressure in
terms of potential liabilities. The implementation
of the labor insurance pension program in 2009
and rapid changes in population structure (aging
and low birth-rate) have both seriously disrupted
the financial stability of the labor insurance
program. To facilitate national pension system
reform, on May 30, 2016, the government
administration established the Pension Reform
Committee, comprised of representatives from
different occupations as well as experts and
scholars. The Committee has convened twenty
committee meetings, four regional forums and
one national affairs conference. The conclusions
in the national affairs conference have served
as the statutory basis for pension system
reform. On March 30, 2017, the Executive
Yuan submitted the draft bill for pension system
reform to the Legislative Yuan for deliberation.
It was clearly stipulated in the draft bill that the
government shall assume ultimate responsibility
for payment. The government, in addition, plans
an annual injection of at least NT$20 billion to
the labor pension fund. Furthermore, the service
period used for calculating the average monthly
insurance salary will be extended as appropriate.
There will also be a slight adjustment to the
premium rate. In other words, some system-
related adjustments will be made where
necessary. As for the medium- and long-term,
there will be regular financial reviews at least
once per five years. Rolling wave adjustments
will be made based on the latest demographic
structure and financial circumstances, in the hope
of gradually building up a steady pension system
to protect the economic safety of seniors.