Labor retirement fund posts gains of NT$65.9 billion in 2012

In addition, the Labor Insurance Fund also recorded a gain of NT$31.3 billion. This makes up for the losses that the funds incurred in 2011, earning several billion back, the council said.

In the wake of misuse of the funds by a private investment company, the Deputy Minister of the Labor Pension Fund Supervisory Committee (LPFSU), Liu Li-ju (劉麗茹), said that this year they will hire a management team to operate the funds instead of an individual fund manager like in the past.

Liu added that the managing team and each member's families will be prohibited from buying stocks related to the funds, cutting down on all possibilities of under-the-table stock manipulation.

According to the CLA, the Labor Pension Fund and Labor Insurance Fund together incurred over NT$100 million in losses in 2010 after two firms contracted to manage the funds invested in shares of Ablerex Electronics Co., a leading manufacturer of uninterrupted power supplies, which was involved in a stock price manipulation scandal.

Liu explained that after the New Labor Pension Fund system took effect, the funds have experienced steady increases, recording growth of NT$159 billion in 2012 to hit a total of NT$1.4 trillion. The new labor pension system requires employers to steadily deposit 6 percent of a worker's monthly wages into their retirement accounts, which is the main reason for the steady growth, Liu said.

Although the global economy experienced financial difficulties, Liu said that the labor pension funds still managed to pull an average profit rate of 4.8 percent throughout the entire year. Even after experiencing the 2008 financial crisis and the 2011 stock market crash, the funds managed a net profit of NT$90.8 billion.

As for the labor insurance funds, the LPFSU explained that it posted a profit rate of 6.25 percent, including an investment profit of 11.92 percent. This recorded a new high in three years, which was above the expected gain of NT$17.1 billion, a profit rate of 3.328 percent.

In 2011, the funds suffered losses from market difficulties caused by the eurozone debt crisis and stock market crashes. The labor insurance funds suffered losses of minus 2.97 percent, incurring losses of NT$12.45 billion; the labor pension funds posted a minus 3.7 percent decline, incurring losses of NT$45.5 billion.

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