Taipei:Labor groups have urged the government to increase the mandatory employer contribution rate under Taiwan's labor pension system, criticizing the lack of legislative reform despite ongoing calls to enhance workers' retirement benefits.

According to Focus Taiwan, the May 1 Action Alliance, consisting of labor unions and advocacy groups, protested outside the Executive Yuan and Legislative Yuan in Taipei, demanding that the government propose amendments to the Labor Pension Act. Chiu I-kan, president of the Confederation of Taipei Trade Unions, highlighted that the employer contribution rate has remained at 6 percent for 21 years, despite the system's introduction in 2005 with expectations of gradual improvements.

Chiu called for a minimum contribution rate of 12 percent, warning that the current rate is insufficient as wages struggle to keep up with the rising cost of living. Taiwan's newer pension system, established in July 2005, requires employers to contribute at least 6 percent of workers' monthly wages, a rate unchanged for over two decades.

Government data shows that as of July 2026, approximately 7.87 million workers had contributions under the new system, while around 115,000 remained under the old system as of December 2025. The older system calculates retirement benefits based on years of service and average wages prior to retirement.

Chiu also recalled President Lai Ching-te's campaign promise to promote higher employer contributions through tax incentives or other measures, expressing frustration at the lack of a government amendment proposal. Taiwan Workers' Struggle General Confederation Secretary-General Yao Kuang-tsu noted that the average employer contribution rate was just 6.04 percent in 2025, emphasizing the government's role in ensuring higher contributions as unions are already tasked with negotiating wage increases and other benefits.

The alliance questioned lawmakers' efforts to advance pension reform, noting that 17 proposed amendments to the Labor Pension Act had only passed their first reading and risk lapsing if not completed by January 2028.

In response, the Ministry of Labor stated it remains open to raising mandatory employer contributions and will evaluate potential changes while consulting with stakeholders. The ministry has introduced incentives for higher contributions, incorporating them into ESG evaluation criteria and using them as bonus criteria for national awards managed by the Workforce Development Agency and the Ministry of Economic Affairs.