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Application and Receipt of the Individual Labor Pension Accounts

  1. Qualifications and procedures for claim pension payments
    The new system stipulates that a worker, whether currently employed or already retired, has complete ownership of his/her individualized pension account. A worker may legally apply to receive pension payments as long as he/she reached the age of 60. However, if a worker is under 60 years old but has become unable to work, he/she may apply for the labor pension ahead of schedule. When filing a claim for receipt of pension payments, the applicant must complete, and submit the "Application to Claim Pension Payment" form in person. A worker applies directly to the Ministry of Labor, Bureau of Labor Insurance, and no longer needs to apply through his/her employer, as the application no longer requires the seals of the business entity or the responsible person. In cases when a worker dies before reaching the age of 60, family members or designated beneficiaries may apply to receive the deceased worker's pension payments by submitting the "Application to Claim Worker's Pension Payment by Survivor(s)" or "Application to Claim Worker's Pension Payment by Designated Beneficiary" form along with the requisite personal and other forms of identification.
     
  2. Pension payments
    (1)Lump sum pension payments
    A worker with less than 15 years of work seniority or with 15 years or more of work seniority who choose to receive, at the time of application for lump sum pension payment, shall receive a payment amounting to the actual amount of principal plus accrued dividends reflected by the individual pension account's balance during the month of application. Contributions not yet cleared at the time of application due to time lag shall be paid out, interest-free, at a later date. When a worker claims the pension payments, if there are any unallocated profits, that is, the total profits accrued less the profits already allocated to his/her pension account, the unallocated part shall be calculated based on the rate of return for the most recent month announced by the Bureau of Labor Funds, Ministry of Labor, during the month when the application was filed. It shall be calculated up to the month of his/her application.

    (2)Monthly pension payments
    Monthly pension payments refer to a sum of money distributed on a monthly installment basis. The source is the accumulated funds in a worker's pension account minus the requisite insurance fees. The specific amount of the each monthly installation is determined by various factors such as the life annuity chart, average life expectancy and predetermined interest rates. Contributions that have not cleared into the individual pension account are noted as having contributed. Missed contribution deadlines are counted as contributed. Missed contributions are to be made up by deducting from the pension payments of the upcoming month. The dividends not paid out at the time of application shall be calculated with the interest rate of the previous period, including the month at the time of application, and combined with the total accrued dividends.

    (3) Calculation of guaranteed/insured dividends
    According to the Labor Pension Act, dividends accrued from a worker's pension account may not be lower than the dividends paid for a two-year fixed deposit from a local bank, and any shortfall is to be compensated by the National Treasury. Said guaranteed profits shall be calculated from the date when the contributions were first started to the end of the month when the worker files an application for the labor pension. The cumulative amount of the actually allocated profits for each year shall be compared with the cumulative amount of guaranteed profits. If the former is lower than the latter, the difference shall be made up by the Treasury according to law. The interest rate on a two-year fixed deposit from a local bank refers to the average annual rate derived from the fixed interest rate announced on the first working day of each month by the following six banks: The Bank of Taiwan Co., Ltd., First Commercial Bank of Taiwan Co., Ltd., Taiwan Cooperative Bank Co., Ltd., Hua Nan Bank Co., Ltd., Land Bank of Taiwan Co., Ltd., and Chang Hua Bank Co., Ltd.

    (4) Method of distribution for monthly pension payments
    Monthly pension payments are distributed on a seasonal basis with 3 months of combined payments distributed every 3 months beginning at the end of February, before May 31 st , before August 31 st , and before November 31 st . First time applicants will start receiving their payments following approval by the Ministry of Labor, Bureau of Labor Insurance on the first season following the month of application. For example, whom filed the pension payment application in January 2014 will receive in the first payment season the corresponding payments for the months of February and March.
Last Update:2018-12-02
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