The Bureau of Labor Insurance Encourages the Workers to Make Voluntary Labor Pension Contribution to Ensure a Worry-free Life in Old Age.

To further strengthen the financial security of the workers in their old age, the BLI reminds all workers eligible to the Labor Pension Program (new system) that they may make labor pension contribution on a voluntary basis and develop the habit of saving at an early stage. The amount of voluntary contribution will be deducted from the annual salary income when calculating the income tax. The worker, in the meantime, shall be entitled to the annual distribution of investment returns. On receiving the pension payment, the worker will also enjoy a minimum guaranteed return which is calculated at a rate not lower than the interest rate for two-year term deposit. This will further guarantee the financial security of old life.

The Bureau of Labor Insurance (BLI) expresses that, for all workers applicable to the Labor Pension Program (new system), the employer is currently required to contribute not lower than 6% of the monthly wage of the worker, which shall be deposited into the individual labor pension account of the worker at the BLI. To guarantee a better protection for the retired life, a worker may also make voluntary labor pension contribution not exceeding 6% of his/her monthly wage. The application and payment of such contribution shall be made to the BLI through the employer. A worker may, depending on his/her financial status, opt to contribute to the labor pension at a maximum of 6% of his/her monthly wage. The contribution rate may be adjusted at most two times a year. The worker may, whenever in need, apply to the BLI to discontinue the voluntary contribution through his/her employer.

The BLI, furthermore, provides an example on the calculation of pension payment based on the webpage of “Online Pension Calculator for the Individual Laborer (New Labor Pension System)” provided by the Ministry of Labor. Assuming the monthly salary of a worker is NT$ 42,000, the annual salary growth rate is 1% and the return on investment is 3%, the worker is expected to receive an accumulated pension payment and investment return of approximately NT$2.19 million or more after 35 years of service if he/she relies merely on the 6% contribution from the employer. For a worker who has both voluntary contribution (6%) and employer’s contribution (6%), the accumulated pension payment and investment return is expected at NT$4.38 million or more, which doubles the money received by those without voluntary contribution.

Compared to the workers who merely rely on the contribution from the employers, the workers with voluntary pension contribution may enjoy multiple benefits, including increased protection and well-secured retired life. Employers, self-employed individuals and commissioned contract workers are also lawfully entitled to make voluntary contributions at a maximum of 6% of their monthly wage or income from professional practice. They are also entitled to the guaranteed rate of return and tax credits, thereby increasing the financial security of their old life.