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July 22, 2017

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Gov't responsible for labor insurance: Chen

Premier Sean Chen yesterday said the government bears ultimate responsibility for labor insurance, urging all workers to rest assured.

According to the latest estimation by the Council of Labor Affairs (CLA), the labor insurance fund is facing a deficit by 2017 and may be bankrupt by 2027. Such figures have sparked concern among politicians and the public.

The premier demanded that the CLA submit a report as soon as possible to the special committee for reforming labor insurance — a body established by the Council for Economic Planning and Development (CEPD, 經濟建設委員會). The CLA has been instructed to review both overseas examples and the current structure of labor insurance in Taiwan, including an evaluation of the eligible age for collecting pensions, labor insurance premiums, and the amount of money given to retired workers.

Earlier yesterday, Finance Minister Chang Sheng-ford (張盛和) stated in the Legislative Yuan that since labor insurance is an insurance, it should collect money from its premiums. Furthermore, the monetary burden is too large for the government to pay for the debts that result from the insurance policy.

The premier responded by saying that labor insurance is not only an insurance policy but also a social welfare policy, which the government should fund.

Government Subsidy as the Last Resort: Minister

CLA Minister Pan Shih-wei (潘世偉) said yesterday that government subsidization of the labor insurance fund is a last resort. The CLA should first consider adjusting the premium or delaying the eligibility age.

Current law stipulates that the premium is to be raised by 0.5 percent every year until it reaches 13 percent in 2027. The CLA does not yet have a plan to change the premium rate structure.

Kuomintang (KMT) Legislator Wu Yu-Jen (吳育仁) and Taiwan Solidarity Union Legislator Lin Shih-chia (林世嘉) both proposed to add a clause in the Labor Insurance Act that would require the government to subsidize labor insurance when necessary.

Third Highest Pension

KMT Legislator Wang Yu-min (王育敏) said that the current labor insurance policy gives retired workers a yearly pension equivalent to 70 percent of an employee's annual salary. Wang said this is the third highest in the world.

Greece offers its workers 93.6 percent — the world's highest, while Spain offers 73 percent — the world's second highest, according to Wang,

Wang said that in Germany the premium rate is 19.5 percent, and its workers receive only 40.5 percent of their annual salaries in retirement. In Japan, the premium rate is 14.99 percent, and a worker gets 35.5 percent of their annual salary after retiring. In Taiwan, however, the premium rate is just 8.5 percent, and its workers receive 70 percent of their yearly salaries.

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