Creating a Better Retired Life by Participating in the Voluntary Pension Contribution of the Labor Pension System

To encourage the workers to participate in the voluntary pension contribution, the BLI has organized various promotional activities. According to the BLI’s statistics as at the end of October, 2021, there were total 7,245,165 workers participating in the labor pension system, among whom 817,998 workers having voluntary pension contribution, accounting for 11.29% of the total and marking a record high. This highlighted the fact that more and more workers were paying attention to the protection of their retired life.

By participating in the voluntary pension contribution, the workers not only can increase the deposit in their individual labor pension account, but also are entitled to the annual distribution of investment returns against the part of voluntary contribution. On receiving the pension payment, the workers 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 retired life. Furthermore, as a tax credit, the voluntary pension contribution should not be included into the annual salary of the year when filing tax returns.

The BLI expressed that, according to the regulations, the employer should, on a monthly basis, set aside not lower than 6% of the monthly wage of the worker into the worker’s individual labor pension account with the BLI. The employer, in the meantime, should proactively check with the workers whether they were willing to, based on their respective financial status, make voluntary labor pension contribution not exceeding 6% of their monthly wage. The application and payment of such contribution should be made to the BLI through the employer. The voluntary pension contribution could be discontinued at any time, which should be reported as well.

The BLI further indicated that students who have part-time job and new graduates who enter the workforce might consider small-amount contribution, thereby developing the habit of saving. Furthermore, employers, self-employed individuals and contract workers were also lawfully entitled to make voluntary contributions at a maximum of 6% of their monthly wage or income from professional practice. They were also entitled to the guaranteed rate of return and tax credits.