[Investment] Changes in Retirement Benefits

Based on recent changes in retirement benefits, according to the law an employee upon retirement currently may receive benefits from up to three sources, depending on the employee’s retirement scheme selection.

If the employee has selected the retirement scheme pursuant to the Labor Standards Law (LSL), the employee may receive up to 45 months of full salary for 30 years of service. Employers shall make contributions of no less than 6% of employees’ monthly salary to employees’ portable individual pension fund account for those employees who have joined the retirement scheme under the Labor Pension Act (LPA). For employees covered under both pension schemes - LSL & LPA - the employee is eligible for retirement benefits based on applicable service year(s) under each scheme. The third source of benefits is the old-age benefit under the Labor Insurance scheme (LI), which provides up to 45 months of the LI insured salary.

Companies, of course, can offer their own retirement benefits to employees as a supplement to the above legal requirements. Multinational companies in Taiwan are more likely than local companies to offer supplemental retirement plans to employees.