Page 50 - BLI-Brief Introduction

Brief Introduction
INSURE
Your Life

Taiwan is currently faced with the prospects of Currently, the seniority pay rate of labor insurance
decreasing childbirth, population aging, and pension is 1.55%. Take an insured person who has
reducing household living resources; therefore, 30 insurance coverage years for example: he/she
how to enhance elderly economic security for will be eligible for an income replacement rate as
laborers has become an important issue. The high as 46.5% upon retirement. Plus the income
elderly economic security model includes three substitution rate provided by the second level
levels. The first level is the basic public pension, like of labor pension, the total income replacement
the national pension and labor insurance pension rate has already exceeded the standard of
programs, which belong to the social security 55% recommended by the International Labor
system mandatorily implemented by the country. Organization (ILO).
The second level is the corporate pension, which is
the pension given by employers to their employees, Establishment of the Labor
such as the old and new labor pension programs.
Both the corporate and public pension programs Pension Program

have the effects of saving and risk sharing. The third The Labor Pension Act (new program), which was
level is the commercial pension, which is the annuity implemented on July 1, 2005, is supported by two
insurance paid by individuals from private insurance pillars of “individual labor pension accounts” and

companies. It primarily enables individuals to save “annuity insurance”. All employers are required to
for their retirement to make up for the inadequacies contribute labor pension (at least 6% of workers’
of social insurance and corporate pension. After monthly wages) into individual labor pension
the new labor pension, national pension, and accounts and workers can voluntarily deposit 6%
labor insurance pension programs continued to be (or less). Workers own labor pension accounts; the
implemented, the framework of basic economic coverage years and pension are cumulative, not
security for laborers’ elderly lives has been founded. affected by their changing jobs or the closure of

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

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