Labor Retirement System in Taiwan: Key Provisions and Requirements

Strategic Insights -

Taiwanese workers who began employment before July 1, 2005, are subject to the retirement provisions of the Labor Standards Act. This includes foreign nationals who are not covered by Article 46, Paragraph 1, Subparagraphs 8 to 10 of the Employment Service Act. Employers are required to establish a Supervisory Committee for Labor Retirement Reserves and allocate a monthly amount of 2% to 15% of the total monthly wages of such employees into a designated labor retirement reserve account.

Key Takeaways:

  • The labor retirement system in Taiwan is divided into two parts: the Labor Standards Act (old pension system) and the Labor Pension Act (new pension system).
  • Taiwanese workers who began employment before July 1, 2005, are subject to the retirement provisions of the Labor Standards Act, regardless of whether they chose to continue under the old system or opted for the new system.
  • Foreign nationals, excluding those covered by Article 46, Paragraph 1, Subparagraphs 8 to 10 of the Employment Service Act, are subject to the retirement provisions of the Labor Standards Act, including foreign spouses, professionals, and workers with permanent residency status.
  • Employers are responsible for establishing a Supervisory Committee for Labor Retirement Reserves and allocating a monthly amount of 2% to 15% of the total monthly wages of such employees into a designated labor retirement reserve account.
  • Retirements are categorized into voluntary and mandatory retirement, with the current mandatory retirement age being 65, although employers and employees may negotiate a later retirement age.
  • Employers are required to calculate the retirement payment in accordance with the law and disburse it within 30 days.

Statistics:

  • 2% to 15%: the monthly allocation for labor retirement reserve account by employers.
  • 2005: the year before which Taiwanese workers are subject to the retirement provisions of the Labor Standards Act.
  • July 1, 2005: the date before which Taiwanese workers are subject to the retirement provisions of the Labor Standards Act.
  • 55 years old: the minimum age for voluntary retirement for workers who have worked for the same employer for 15 years or more.
  • 25 years or more: the service requirement for voluntary retirement regardless of age.
  • 60 years old: the minimum age for voluntary retirement for workers who have worked 10 or more years.
  • 65 years: the current mandatory retirement age.
  • 30 days: the time frame for employers to disburse retirement payments.

Sources:

  • Taipei City Government, Taiwan. https://english.gov.taipei/News_Content.aspx?n=A11F01CFC9F58C83&sms=DFFA119D1FD5602C&s=6F657B8789A7A9B5