Executive Yuan Approves Voluntary Pension Contributions for "Old System" Workers, Aiming for July Implementation

(CNA Taipei, July 2, 2024) The Executive Yuan today approved the "Voluntary Pension Contribution and Early Settlement Plan for "Old System" Labor Pension," greenlighting "old system" workers' ability to voluntarily contribute to their pensions. Furthermore, "old system" workers who meet retirement requirements will be able to opt for early settlement of their old system pension funds during the contract period, subject to mutual agreement between labor and management. The policy is slated for implementation as early as the end of July.

The Executive Yuan today passed the "Voluntary Pension Contribution and Early Settlement Plan for "Old System" Labor Pension" proposed by the Ministry of Labor. The Ministry of Labor reported that the new labor pension fund has achieved an annualized return rate of 7.64% from its establishment in July 2005 to the end of 2025, with annualized returns exceeding 15% in the previous two years. During a press conference after the meeting, Minister of Labor Hung Tzu-hsun explained that many labor groups have recently expressed a desire for "old system" workers to have the opportunity to voluntarily contribute to their pensions, participate in the investment and income distribution of the new system's labor pension fund, and enhance their retirement security. Therefore, this adjustment plan was proposed.

Hung explained that the plan has two parts. First, "old system" workers will be allowed to participate in the voluntary contribution portion of the new system. According to Ministry of Labor data, after the new plan is launched, "old system" workers can inform their employers of their intention to voluntarily contribute to their pensions. Employers will then apply to the Bureau of Labor Insurance for voluntary contributions on behalf of these workers to establish individual pension accounts. Once the Bureau of Labor Insurance issues a payment notice, employers will deduct the voluntary contribution amount from the workers' salaries and remit it to their individual accounts at the Bureau of Labor Insurance.

Second, Hung stated that the second part of the plan allows "old system" workers who have already made voluntary contributions and "meet retirement requirements" to, after voluntarily contributing, agree with labor and management to deposit their early-settled old system pension funds into their new system individual accounts, thereby participating in the new system fund's investment and utilization.

Hung emphasized that the plan does not encourage early retirement but aims to provide more comprehensive security. It also does not involve "old system" workers transitioning to the new system.

Regarding the legal adjustments involved, Hung stated that no amendments to laws requiring submission to the Legislative Yuan for review are necessary. The Ministry of Labor will announce the revision of the "Enforcement Rules of the Labor Pension Act" today, with the goal of implementation before the end of July.

Executive Yuan spokesperson Li Hui-chih, presiding over the post-meeting press conference, relayed Premier Cho Jung-tai's remarks. Premier Cho pointed out that participating in the stable investment and income distribution of the new labor pension fund can substantially increase retirement savings, establishing a long-term and secure guarantee for old age. He also noted that the plan will not incur additional costs for employers and maintains flexibility for businesses, yielding concrete benefits for promoting labor-management harmony. (Editor: Lin Shu-yuan) 0702