Voluntary contribution brings multiple benefits ensuring an enjoyable retirement life
Labor pension plays a crucial part in ensuring the economic security of workers in old age. According to the Labor Pension Act, in addition to the employer's monthly pension contribution of no less than 6% of the employee's salary, the employee can also voluntarily contribute to his or her own retirement benefits within the range of 6% of the monthly salary. According to the latest statistics from the Bureau of Labor Insurance (BLI), the number of workers who have made voluntary contributions by the end of May 2024 has reached a record high of 1,126,087, accounting for 14.87% of the total number of contributions and highlighting the fact that an increasing number of workers are paying greater attention to the economic security of their retirement life.
The BLI emphasizes the importance of participating in voluntary pension contributions as early as possible. The longer the payment period is, the higher pension amount a worker can ultimately receive. From this perspective, students engaging in part-time work or fresh recruits embarking on their careers are all recommended to participate as early as possible. Furthermore, employers who actually engage in labor work, self-employed workers, commissioned workers, and workers to whom the Labor Standards Act does not apply can also voluntarily contribute to their pensions within the range of 6% of their monthly wages or business income.
The BLI further explains that workers can choose to convey their intent to make voluntary contributions to their employer either in person or in writing. Their employer will then forward the request to the BLI, collect the voluntary contribution amount from the employee every month, and pay it to the BLI. The voluntary contribution rate for labor insurance can be adjusted up to twice a year, and contributions can be suspended at any time by asking the employer to forward the request to the BLI.
Workers who voluntarily contribute to their retirement pensions will be able to not only establish good savings habits early in their careers and increase the accumulated amount of their personal pension accounts, but also participate in the distribution of investment income every year. When the time comes to claim their benefits, they will be entitled to a guaranteed rate of return calculated which shall not be less than 2-year time deposit interest rate of local banks. Furthermore, as a tax credit, voluntary pension contributions will not be included into the tax on the annual salary when filing tax returns.