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New labor insurance pension system to go into effect Jan. 1

New labor insurance pension system to go into effect Jan. 1

Taipei, Dec. 31 (CNA) A new monthly payment-based labor insurance pension system will go into effect Jan. 1, setting a milestone in protection of local retired workers' rights, the Cabinet-level Council of Labor Affairs (CLA) announced Wednesday.
At a ceremony to mark the new system's inauguration, President Ma Ying-jeou said that along with the labor insurance pension system, the national health insurance, the national pension system newly put into effect and other forms of social insurance, Taiwan's social security system is approaching international standards.
He further noted that to guarantee laborers' rights, a plan is being studied to set up a workers' fund to help them file lawsuits should they be illegally laid off.
"The monthly payment-based labor insurance pension is the most important reform of the labor insurance system; it permits retired workers to receive benefits every month. The longer they live, the more payments they will receive, " said CLA Minister Wang Ju-hsuan, who added that around 2 million retired workers will benefit from the new system as soon as it goes into operation.
The approval of the new system is considered Wang's first major achievement since Ma's administration took office in May.
The inauguration ceremony was also attended by Premier Liu Chao-shiuan and Legislative Yuan Speaker Wang Jin-pyng, as well as legislators who approved the system.
The labor insurance pension system, mapped out over 15 years and designed to better guarantee the welfare of 8.8 million retired workers, was passed after a final reading by the Legislative Yuan in July.
The new system's premium rate begins at 7.5 percent, increasing year by year to 13 percent, with an income substitution factor of 1.55 percent.
Prior to the implementation of the new system, retirees received their pensions in a single lump sum, the value of which risked being eroded by inflation and poor investment.
The new system will permit retired workers from the age of 60 to choose to collect their pension in either a single lump sum or to receive it in monthly instalments until death.
If they choose to receive monthly payments, the amount they will be able to receive after eight years, in average, will outstrip the total amount if they receive the lump sum, according to the CLA.
In addition, survivors or designated beneficiaries of a deceased worker who dies before reaching pensionable age can apply to receive a lump sum or monthly payment from the deceased worker's pension account.
If the insured worker is assessed after an accident as being unable to work for the rest of his or her life, he or she can also apply for either a lump-sum pension or monthly payments.
Retired workers opting for the monthly payments will receive an amount equalling the number of years they have participated in the labor insurance system times their average monthly wage times the income substitution factor.
(By Emmanuelle Tzeng)




Updated : 2021-05-13 03:05 GMT+08:00