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Updated Thursday, March 20, 2008 0:00 am TWN, The China Post news staff

Mandatory retirement age for workers to be hiked to 65

TAIPEI, Taiwan -- The Cabinet yesterday approved a set of revisions to the Labor Insurance Act, raising the retirement age for workers in the private sector to 65 from the existing 60 in line with the growing demand by elderly people for employment, according to the Council of Labor Affairs (CLA).

The revisions will have to be ratified by the Legislative Yuan to take effect, CLA officials said.

Under the revisions, those aged over 65 or those who have received pensions will also be able to have vocational disaster insurance if employed.

In addition, the childbirth subsidy given to female workers will be raised to the equivalent of three months’ salary from the existing one month. It is estimated that around 130,000 women workers will benefit from the increase.

In related news, the CLA also revised the act to hike the minimum monthly pension workers can receive after they retire at age 60 to NT$4,000 from NT$3,000, the same level as the minimum national annuity pension that will take effect on Oct. 1 this year.

In addition, the formula for calculating the labor annuity pension on a monthly basis is revised as the insured monthly salary x (times)1.3 percent x the number of years of insurance coverage, up from the original 1.1 percent.

Under the new formula, if a worker retires after having been insured for 25 years with an insured monthly pay hitting the highest level of NT$43,900, then the individual may receive a monthly labor pension of NT$14,268 based on the formula of NT$43,900 x 1.3 percent x 25.

If the insured worker chooses to take the lump-sum retirement cash payment, then the worker can receive only NT$1.536 million. Accordingly, as long as the monthly labor pension payment of NT$43,900 has been taken for eight years and nine months, then the total sum received will exceed the lump-sum cash payment of NT$1.536 million.

In addition, once an insured worker dies, the survivors will be allowed to receive a labor pension every month, with the amount to be set at 50 percent of the original pension, or the collection of a lump-sum pension payment will be allowed.

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