TAIPEI (Taiwan News) — The labor pension fund generated nearly NT$700 billion (US$21 billion) in returns last year.
Managed by the Ministry of Labor’s Bureau of Labor Funds, the fund is invested to generate profits that directly benefit workers in Taiwan. Annual earnings are allocated to individual pension accounts, per Business Weekly.
The Ministry of Labor reported strong investment performance for labor funds in 2024, driven by the surge in Taiwan’s stock market and other factors. The funds recorded a record profit of NT$1.04 trillion, per CNA.
The labor pension fund, which distributes earnings to workers, also reached a historic high, yielding NT$698.97 billion in profits. Of the 12.9 million individual pension accounts included in the earnings distribution, 58% received over NT$20,000, while 36% were allocated more than NT$50,000.
In 2021, the fund generated a total return of nearly NT$284 billion. In 2022, the fund faced a loss of NT$228 billion, influenced by global market fluctuations.
In 2023, the fund bounced back, achieving a return of NT$478.6 billion. With 12.72 million worker pension accounts, the average payout per worker was NT$37,600, per FarEastone.
The bureau emphasized that earnings distribution varies based on individual contribution amounts and durations. The allocation is not a simple division of annual profits by the number of accounts.
Pension account funds come from a joint contribution system between employers and employees. Employers must contribute at least 6% of an employee’s monthly salary, while workers can make additional voluntary contributions, which qualify for tax deductions.
The labor pension system is divided into the old system and the new system. The old system is based on the Labor Standards Act, while the new system, which came into effect on July 1, 2005, is governed by the Labor Pension Act.
By the end of February each year, the Bureau of Labor Funds announces the previous year’s pension fund performance. Earnings are distributed by the end of March.
If returns fall below the guaranteed minimum, the government covers the shortfall. This safeguard ensures that workers always receive pension payments exceeding the guaranteed minimum, regardless of any single-year fund losses.
