The Cabinet yesterday approved a draft amendment to the Labor Pension Act (勞工退休金條例) to include foreigners who hold permanent residency in the new labor pension system, under which employers are obliged to contribute funds to their employees’ pension accounts.
The change was proposed to establish a “friendly environment” that can help attract foreign professionals to come and work in Taiwan, Premier Lin Chuan (林全) was quoted by Cabinet spokesman Hsu Kuo-yung (徐國勇) as saying.
Lin said he would instruct the Ministry of Labor to communicate with lawmakers on the amendment in the hope that it can clear the legislative floor as soon as possible.
Unlike the previous version, under which 2 percent to 15 percent of a worker’s monthly wage is deposited in a pension reserve fund, the system implemented in July 2005 stipulates that an employer must deposit an amount equivalent to at least 6 percent of a worker’s monthly wage into an individual labor pension account in the worker’s name, while the worker can voluntarily contribute a maximum 6 percent to the pension account.
There have been 6.32 million workers who have had funds allocated to their pension accounts, and the allocation rate on the side of employers has reached an almost perfect level of 99.8 percent, said Sun Pi-shia (孫碧霞), a welfare and retirement affairs division chief at the ministry.
With the amendment, foreigners who work in Taiwan and have permanent residency will be able to enjoy a more secure retirement in Taiwan, she said.
As of Sept. 30, there were 12,682 foreigners with permanent residency in Taiwan, Sun said.
The amendment also extends the timeframe for a beneficiary’s collection of the pension after the death of a worker from five years to 10.
Employers who fail to pay pension or severance compensation will also be faced with higher fines, the official added.
After yesterday’s approval, the bill will be delivered to the legislature for deliberation.