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Business Topic

Transfer and Continuance of the Old and New Labor Pension Systems

  1. Selection and application of the old or new pension system
    (1) A domestic worker currently employed by and have been working at the same enterprise prior to enactment of the Labor Pension Act may have the option to transfer to the new system or remain with the old system.
    (2) A worker who does not make his selection within the allotted time limit automatically remains with the old pension system under the Labor Standards Act. Every worker may transfer over to the new pension system within five years after the Labor Pension Act promulgation (June 30, 2010).
    (3) Upon switching to the new pension system, a worker may not revert back to the old pension system.
    (4) After the new pension system goes into effect, any newly hired worker or a worker who recently switched job from an enterprise that previously subject to the Labor Standards Act is required to transfer to the new pension system.

  2. Work seniority and the new pension system
    (1) Retention of seniority
    A worker who already adopted the old pension system prior to his/her employer's adoption of the new pension system shall retain their previously accumulated work seniority. For a worker whose work contract was terminated due to severance or forced retirement pursuant to the Labor Standards Act or the Occupational Accident Labor Protection Act, the employer must hand out severance payments or pension payments amounting to remaining work seniority and based on the average wage earned at the time when the work contract was terminated. The employer is responsible for allocating these payments within 30 days of terminating the work contract.

    (2) Settlement of Seniority
    A worker and his/her employer may agree to settle the retained work seniority with the remainder of the time left on a work contract outlined in Article 55 and Article 84(2) of the Labor Standards Act.

  3. Retirements payments from agreed settlements
    Workers may transfer the retirement payment received from the agreed settlement of seniority under the old system and transfer it to a personal pension account or an annuity insurance plan offered by the Bureau of Labor Insurance. Pension payments may only be redeemed upon fulfillment of conditions of the new pension system. Accumulated seniority from the old pension is transferable under the new system, although the Bureau of Labor Insurance or insurers should be notified of such a transfer.

  4. Pursuant to the amendment to Paragraph 1, Article 7 and Article 8-1 of the Labor Pension Act which took effect on January 17, 2014, mandatory contributions shall be made for the following groups of people who are employed and subject to the Labor Standards Act: The spouses with foreign nationalities, the spouses from China, Hong Kong and Macau, and those who have acquired the nationality of the Republic of China since July 1, 2010.
    (1) For anyone who worked for the same business entity before and after the enforcement of this amendment: If he/she already had the status of spouse with foreign nationality, spouse from China, Hong Kong or Macau, or citizen of the R.O.C when the amendment took effect, then mandatory contributions shall be made for him/her as of the effective date of this amendment, that is, January 17, 2014. If he/she acquires the status of spouse with foreign nationality, spouse from China, Hong Kong or Macau, or citizen of the R.O.C after the amendment took effect, then mandatory contributions shall be made for him/her as of the date when he/she acquires such a status. If this kind of workers desire to continue to abide by the provisions concerning pensions as stipulated in the Labor Standards Act, that is, the old labor pension system, he/she shall express such a desire to the business entity in writing within 6 months after the effective date of the amendment, that is, by July 16, 2014 or within 6 months after his/her acquisition of said status. Once he/she chooses to abide by the old labor pension system, he/she is not allowed to switch to the new labor pension system later.

    (2) For anyone who is employed after the enforcement of the amendment: If he/she already has the status of the spouse with foreign nationality, the spouse from China, Hong Kong or Macau, or citizen of the R.O.C when he/she reports for duty, then mandatory contributions shall be made for him/her as of the date of his/her reporting for duty. If he/she acquires the status of spouse with foreign nationality, spouse from China, Hong Kong or Macau, or citizen of the R.O.C after reporting for duty, then mandatory contributions shall be made for him/her as of the date when he/she acquires such a status.

  5. The Act for the Recruitment and Employment of Foreign Professionals was approved by the Executive Yuan for implementation as of February 8, 2018. According to Article 11 of the Act, foreign professionals who are hired to engage in professional work and who have obtained permanent residence shall from the date of enforcement of the Act be included in the new labor pension system.
    (1) Foreign professionals who were hired before implementation of this Act, who are still serving in the same business entity after the implementation of this Act, and who were permanent residents of Taiwan when this Act was enacted become mandatory contributors beginning with the date of enforcement of the Act (i.e., February 8, 2018). If said foreign professionals obtain permanent residency only after the enforcement of this Act, such professionals shall be mandatory contributors from the date they obtain permanent residence. If the aforementioned personnel intend to continue using the pension regulations stipulated in the Labor Standards Act (i.e., the old labor pension system) shall submit a written statement regarding such to their employer within six months after the enforcement of the Act (i.e., before August 7, 2018) or after obtaining permanent residency. Workers who opt for the old labor pension system may not opt for the new labor pension system thereafter. Those who fail to choose a system before the deadline shall fall under the new labor pension system.

    (2) Foreign professionals who are hired after the enforcement of the Act and who are already permanent residents of Taiwan when employed in a new job shall be mandatory contributors beginning with their date of employment. Foreign professionals who obtain permanent residency only after employment in a job shall be mandatory contributors from their date obtain permanent residence.
     
  6. In accordance with Article 7, Paragraph 1 and Article 8-1 of the Labor Pension Act amended and promulgated on May 17, 2019, foreign employees who have obtained permanent residency and are applicable to the Labor Standards Act shall be mandatory contributors under the Act.
    (1) Foreign employees who have been hired before the enactment of the amended Act and remain servicing the same business entity thereafter shall be mandatory contributors since the effective date of the amendment (May 17, 2019), subject to that the employee has already obtained the permanent residency on the date when the amendment becomes in force. If the said foreign employees obtain permanent residency only after the enactment of this amendment, such employees shall be mandatory contributors from the date they obtain permanent residency. If the aforementioned individuals intend to remain applicable to the pension regulations stipulated in the Labor Standards Act (i.e., the old labor pension system), he/she shall submit a written statement regarding such to his/her employer within six months after the enactment of the amendment (i.e., before November 16, 2019) or after obtaining permanent residency. Workers who opt for the old labor pension system may not opt for the new labor pension system thereafter. Those who fail to choose a system before the deadline shall fall under the new labor pension system.

    (2) Foreign employees who are hired after the enactment of the amendment and are already permanent residents of Taiwan when employed in a new job shall be mandatory contributors beginning with their date of employment. Foreign employees who obtain permanent residency after employment in a job shall be mandatory contributors from their date of permanent residency.
Last Update:2019-05-31
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