The Cabinet approved Thursday an draft amendment to the Labor Pension Act 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 (??) was quoted by Cabinet spokesman Hsu Kuo-yung (???) as saying.
Lin said he will instruct the Ministry of Labor (MOL) to actively 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 new 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, according to Sun Pi-shia (???), a division chief of welfare and retirement affairs at the MOL.
With the amendment, foreigners who work here 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, according to Sun.
The amendment also extends the timeframe for a beneficiary's collection of 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 Thursday's approval, the bill will be delivered to the Legislature for further action.
Source: Focus Taiwan News Channel