Labor Insurance Fund may be bankrupt by 2027

By Huang Pang-ping and Jake Chung  /  Staff reporter, with staff writer

People visit the office of the Labor Insurance Bureau in Taipei in an undated photograph.

Photo: Taipei Times

The Labor Insurance Fund is likely to start posting losses by 2018 and could face bankruptcy by 2027, with liabilities rising to NT$8.36 trillion (US$248.8 billion) from NT$6.83 trillion, according to the fund’s latest report released yesterday.

Bureau of Labor Insurance Deputy Director Lee Sung-lin (李松林) said that the fund’s bankruptcy could be delayed until 2038 if policy reforms approved by the Executive Yuan could be implemented.

However, policy implementation has been suspended until president-elect Tsai Ing-wen (蔡英文) takes over the government in May and appoints a new Cabinet, Lee said.

The Executive Yuan had originally planned to subsidize the fund by NT$20 billion to NT$200 billion per year, raising the insurance premium rate by 0.5 percentage points until it reaches 18 percent, expanding the insured salary levels by 12 months per year to reach 144 months from the current 60 months, and lowering payout rates from 1.55 percent to 1.3 percent for those with a monthly salary of NT$30,000.

The report did not differ much from the previous report, aside from a sharp increase of NT$1.53 trillion in liabilities, due to an aging society, Lee said

The fund’s return on investment has seen an increase over the past decade, which has contributed to reducing its debts, Lee said.

However, rising payouts because of increases in annual salaries of the insured and an aging society ensure that the fund would continue accruing debt and would eventually be bankrupt, the report said.