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Q&A regarding the 2015 Consumer Price Index Accumulated Growth Rate Adjusted Labor Insurance Pension Payments Last Modified:2016-09-06

Q1:

I currently receive NT$20,000 in old age pensions per month, will this amount be increased in the future?

A1:

According to Article 65-4 of the Labor Insurance Act and Article 96 of the Enforcement Rules of the same Act, for individuals who are currently receiving labor insurance pension payments, payment amounts will be adjusted in accordance with the Consumer Price Index (hereinafter referred to as CPI) accumulated growth rate when annual CPI growth rate exceeds 5% starting from the year they begin receiving pension payments.

   
Q2:

How is the CPI accumulated growth rate for each year calculated ever since the labor insurance pension system was launched in 2009 up to 2014? 

A2:

Calculations for the annual CPI accumulated growth rate for each year of pension issuance is as follows:

 

Year of Issuance

Base Period Annual Average CPI

Accumulated Growth Rate
(Remark 2)

Point of Adjustment 

Calculation Formula
(Remark 3)

2009

102.74

2013-2014

1.20%

Not qualified for statutory adjustment standards

﹝(103.97/102.74)-1﹞* 100%=1.20%

2010

98.60

2010-2014

5.45%

Adjustments effective from May, 2015 

(103.97/98.6)-1* 100%5.45

2011

100.00

2011-2014

3.97%

Not qualified for statutory adjustment standards

﹝(103.97/100)-1﹞* 100%=3.97%

2012

101.93

2012-2014

2.00%

Not qualified for statutory adjustment standards

﹝(103.97/101.93)-1﹞* 100%=2.00%

2013

102.74

2013-2014

1.20%

Not qualified for statutory adjustment standards

﹝(103.97/102.74)-1﹞* 100%=1.20%

2014

103.97

2014-2014

0.00%

Not qualified for statutory adjustment standards

﹝(103.97/103.97)-1﹞* 100%=0%

 

Remarks:
1. This table is compiled according to Splicing Table of Consumer Price Indices published by the Directorate-General of Budget, Accounting, and Statistics, Executive Yuan.
2. Pension recipients for the year 2009, for whom the CPI growth rate exceeded 5% in 2013 have already begun receiving adjusted payment amounts since May, 2014. CPI accumulated growth rate for 2009 should undergo recalculations from the following year onwards. (For 2014, the base period for the annual CPI growth rate should be 2013)
3. Accumulated Growth Rate= [(Average CPI for the previous year/Base period annual average CPI)-1] *100% (results should be rounded off to the second decimal point).

   
Q3: Will the Labor Insurance Pension premium payments for 2015 undergo adjustments?
A3:

Yes, but only those who applied for labor insurance pension payments in 2010 are eligible for adjustment. Recipients of the labor insurance pensions in 2010 who are still eligible for pension payments will be receiving pension increments starting May, 2015 since the CPI accumulated growth rate for 2014 has exceeded the statutory adjustment standard of 5% and now stands at 5.45%. For recipients receiving pension issuance in a different year, CPI accumulated growth rate has not exceeded 5% and they will therefore not be eligible for payment adjustments.

   
Q4:

I began receiving old age pensions in October, 2009, and my pension payment amount has been adjusted by 5.2% since May, 2014. Will it be adjusted again in 2015?

A4: No, it will not. For recipients who began receiving pension payments in 2009, the CPI accumulated growth rate had already reached 5.2% in 2013. After payment amounts were adjusted in May of 2014, CPI calculations should be readjusted to reflect a base period of 2013. According to this new calculation formula, CPI accumulated growth rate from 2013 to 2014 does not exceed the statutory standard of 5%. Therefore, no adjustments will be made in 2015.
   
Q5:

Further to the previous question, my pension amount was originally adjusted to reflect a growth rate of 5.2%. Will it reflect a rate of 5.45% in 2015?

A5:

No, it will not. The point of adjustment for labor insurance pension amounts is calculated according to the year when recipients begin to apply for payment. When CPI accumulated growth rate reaches 5%, payment amounts will be calculated according to this growth rate. For recipients who began receiving payment in 2009, the pension amount they receive in 2015 will be calculated according to the CPI accumulated growth rate of 5.2% attained in May, 2014.

   
Q6:

CPI accumulated growth rate between 2010 and 2014 is 5.45% and is eligible for adjustment according to statutory standards. I began receiving old age pension payments in February of 2011, will the payment for May, 2015 be adjusted according to these calculations?

A6:

No, it will not. The purpose of legislating Article 65-4 of the Labor Insurance Act is to ensure that pension payments laborers are entitled to at the time of their retirement are consistent with their purchasing powers at a future date. With the exception of recipients who began receiving pension payments in 2010, for whom CPI accumulated growth rate has exceeded 5% and have undergo due adjustment, pension payments for recipients from other years have not reached the statutory standard of 5% and will therefore not be adjusted. Individuals who began receiving pension payments in February 2011 will not be receiving adjusted payments. They must wait for CPI accumulated growth rate between 2011 and a later date to exceed 5% before qualifying for adjustment.

   
Q7: If my pension payment amounts were adjusted in May, 2015, when will I begin receiving payments that reflect this adjustment? 
A7:

According to Article 49 of the Labor Insurance Act Enforcement Regulations, pension payments should be issued before the end of the following month. Therefore, labor insurance pension payments that have been adjusted starting May, 2015 will be issued in June, 2015.

   
Q8:

Further to the previous question, why is my pension payment amount adjusted starting May, 2015 and not January, 2015?

A8:

Labor insurance pension payments are adjusted when CPI accumulated growth rates exceed 5% as published by the central directorate administration. The Ministry of Labor will ratify requests for pension adjustments proposed by the Bureau of Labor Insurance accordingly. The CPI from the previous year can only be confirmed in April of 2015, which is why subsequent administrative procedures cannot be completed until May. Therefore, all adjustments will be made starting May, 2015.

   
Q9: I began receiving old age pensions of NT$20,000 per month in July, 2010. By how much will my old age pension payment increase in May, 2015? 
A9:

It will increase by NT$1,090. Calculation Formula: NT$20,000 x 5.45%= NT$1,090

   
Q10: Further to the previous question, how do I know if my pension payments have been adjusted and by how much? Will the Bureau of Labor Insurance notify me via written notice?
A10:

You will receive relevant information on the adjustments when you update your deposit book upon the receipt of your pension at the end of June, 2015. The pension payment for May 2015 will be divided into 2 separate sums when it is issued at the end of June. One of these sums will be the original pension amount of NT$20,000; the other sum is the additional amount of NT$1,090 that is based on a calculation of the 5.45% CPI accumulated growth rate (deposit summary remark will show "Price Adjustment"). However, pensions will be issued as one single sum from July onwards. In compliance with government policies in environmental conservation and carbon reduction and in view of the objective to streamline administrative procedures, the Ministry of Labor will be ratifying all adjusted labor insurance pensions according to the official calculation formulas. No other forms of written notice will be issued by the Bureau of Labor Insurance.

   
Q11: Old age pension payments are adjusted according to the CPI accumulated growth rate. Will the adjustment outcomes be different due to respective calculations according to Formula 1 or Formula 2? 
A11: No, they will not. Old age pensions are calculated according to the original standards of issuance with an additional amount that is calculated according to the CPI accumulated growth rate. The adjustment outcomes for both Formula 1 and Formula 2 will be the same.
   
   
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