Pension System for Foriegners

Hi Guys

I work for a big company in Taiwan. I am hired on a local contract. Not an expat contract.

My employer contributes 6% of salary every month in a so called ‘pension plan’ - but it is actually , its paid NOT into a pension fund -instead -the company is just keeping the monthly 6%, and will pay it out to me when I resign.

I have told the company that this is not fair, as the contributions are not earning any interest, so this scheme has no value as a pension savings plan.

I have asked the company to give me the 6% on top of salary (even if its subject to tax) so that I may invest to money in a pension scheme in my home country (South Africa). They have refused.

Ideally I would like to find a way to force/prevent my company from withholding the 6% from me with no interest, and either get them to pay it into an interest bearing account, or add it to my salary, so I may invest it on my home country.

I would like to find out what my options are for a pension in Taiwan

What are my rights to a pension in Taiwan?
What government agency can I contact with help with pension law/policy?
Can anybody suggest a way forward to me?

Regards,
Dean

You are a foreign national, right?

I don’t believe your employer is obligated to contribute anything toward a ‘pension plan’.

Are they actually deducting 6% from your salary?

That sounds like the Lao Bao government pension scheme , I’m not sure if you are able to opt out or not.

Yes, im a foreign national.

To be clear. The 6% is over and above my salary. Its not actually deducted.

  • For me, as a foreigner worker on a local contract. The 6%, the company is just keeping it and not giving it to me, until I resign, when it is paid to me in full. But amount does not gain any interest what-so-ever.

  • For a local taiwanese worker, the 6% would be invested into whatever the Taiwanese pension scheme is, and they would get all the benefits of it.

As the companies HR explained it to me: “Since foreigners are not eligible for pension in Taiwan, we will just keep the 6% until you leave”

My problem with that is… a pension is an investment that should grow and compound ever time. My company simply keeping the 6% and not giving me any interest, is hurting my ability to save for retirement. At least if they paid me the money, i could invest it myself.

So I’m trying to find some advice or solution on what I should do.

Your employer doesn’t need to give you anything. Foreigners are not eligible to enroll in the national pension scheme and employees do not have to contribute. Your employer is being very decent by giving this to you (f if in fact they are). Perhaps they don’t understand they are not required to give you anything. Forget about the interest but do get this arrangement in writing. Otherwise you may be in for a bigger disappointment when you leave.

Wife said there are two pension systems here. One according to labor law and another one. One of the two is only for Taiwan nationals. So my company does the one for me which I am eligible for and instead of the other one they pay the 6% (I think it was) in cash to me, which then gets wasted by my wife for nonsense (that’s how she told me).

Considering this is over and above your salary, that sounds right. I think you are better off not making waves, and perhaps even going to tell them that you regret having misunderstood the issue. You may be setting up ill will for yourself that could negatively affect you in the future.

I’m not sure the bit about foreigners not being able to get the laobao?
The way laobao works is you pay something like 6% and the employer matches that.

Indeed it is not worth the discussion. How much in interest do you think one can get in the pension market in TW? 2%? You’re losing sleep over 1 penny on every 8 bucks you make per year. Just hang on to the 6% and be glad if they don’t sweep that out from under your feet.