In a hearing held by the Legislative Yuan’s Health, Environment and Labor Committee, CLA Minister Wang Ju-hsuan admitted that the economic downturn and plummeting stock market had eroded the funds’ net worth between January and September.

The labor retirement fund had unrealized losses of NT$42.5 billion during the period, for a rate of return of minus 5.82 percent, while the labor insurance fund had unrealized losses of NT$37.3 billion, for a rate of return of minus 10.56 percent, Wang said.

The CLA held stocks worth NT$96.9 billion as of the end of September in the two portfolios worth hundreds of billions of Taiwan dollars, she added.

“Maybe stocks are at a low point right now, but investments always have ups and downs, “ said Wang, who added that investing in the stock market required a long-range outlook.

She argued that even if the funds posted losses on paper this year, stocks were still a viable investment option.

The old labor retirement fund has accumulated gains of NT$24.9 billion during its 17 years in existence, with stocks providing an average rate of return of 11.5 percent, she said.

“We are in an economic downturn now, but I will not let workers’ rights suffer,” Wang reiterated.

Huang Chao-hsi, the head of the Labor Pension Fund Supervisory Committee, also said investing in the stock market was still the most effective way to make a profit.

With a new labor pension system set to take effect in January next year, many retired workers chose earlier this year to receive their retirement pension in one lump sum instead of in monthly payments, fearing that the fund would go bankrupt.

The panic threatened the funds’ financial stability in the first half of this year.

But the CLA asserted that after explaining and publicizing the new system, most retirees were now opting to receive a monthly annuity that they will receive until their deaths.

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