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Voluntary Pension Contribution Guarantees a Well-Secured Retired Life

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 2021, there were total 7,242,421 workers participating in the labor pension system, among whom 834,645 workers having voluntary pension contribution, accounting for 11.52% 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 build up the habit of saving, but also can increase the deposit in their individual labor pension account. Furthermore, as a tax credit, the voluntary pension contribution will not be included into the annual salary of the year when filing tax returns. In addition, the voluntary pension contribution is 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 which guarantees a well-secured retired life.

The BLI expressed that, workers applicable to the new labor pension program whose 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. Workers may also voluntarily contribute up to 6% of their monthly wage to the labor pension. They should apply for and pay the voluntary contributions to the BLI through their employers. Workers may, depending on their financial status, opt to contribute to the labor pension at a maximum of 6% of their monthly wage. The contribution rate may be adjusted at most two times a year. Workers may, whenever in need, apply to the BLI to discontinue the voluntary contribution through their employer.

The BLI further indicated that students who have part-time job and new graduates, who enter the workforce, could apply for and pay the voluntary contributions as soon as possible. The longer time they contribute, the more return over the years they can have, as to safeguard the retired life. Furthermore, employers, self-employed individuals and 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.
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Last Update:2022-05-02