Hello.
Has anyone got information on Taiwan’s new pension fund law as regards treatment of (foreign) residents or permanent residents?
My company are not offering pay raises this year as they say they have to pay an additional 6% for each person to the government for the new compulsory pension fund scheme.
However, I’m told that foreignors are excluded from this scheme. :s
Is this true?
If not, what happens after you’ve paid several years pension contributions and you then leave Taiwan?
On the surface it looks like another of those “unfinished” laws in Taiwan (oh, we didn’t think of that), so I need to get my facts straight before approaching HR.
Thanks a lot for any help.
Galahad
This is correct.
The Council of Labor Affairs has indicated that the new law applies only to Taiwan nationals.
However, a Taiwan company can elect to establish a personal retirement account for foreign employees.
Under the new law, Taiwanese national employees will be able to take their personal account with them when they leave one company to begin working for another company.
If a Taiwan company establishes a personal retirement account for a foreign national employee, and that foreign national employee leaves the company, he/she may take his account (it is a personal account) to the new company… but the new company will be under no obligation to continue making contributions to this account. In such case, the foreign employee can withdraw from his/her personal retirement account the funds therein.
No employees in Taiwan currently have such an account as the law doesn’t permit them until 1 July 2005.
Haeh? I went to a meeting of the Swiss Chamber of Commerce and specifically asked the lecturer, a Swiss national working for a Swiss law firm in Taiwan this question: Will the pension fund be compulsory for foreigners, too, and he said yes. He said that the government had been thinking of excluding foreigners and had decided against it. Unfortunately, we didn’t have time to discuss on what will happen if a foreign national leaves the country after having paid into the pension fund.
Here are a couple of web links the Swiss Chamber of commerce sent us after the meeting:
cla.gov.tw/
bli.gov.tw/
cla.hilearning.hinet.net/index.jsp
laws.cla.gov.tw
Moderator’s Note: Iris, I mistakenly deleted some of your message. However, per my understanding, the speaker above is wrong.
The CLA has stated that the new law does not apply to foreign nationals.
I fixed the message, thanks!
I guess I should get back to the Swiss guy.
Iris
Thanks for the info all.
So this fund does not begin until July 2005, right?
It would seem my best option is to ask the company to create a fund for us as well.
Thanks again.
Galahad
This also segues into the new rules regarding benefits for foreign nationals teaching at national universities. Up until very recently, we were eligible for pensions (I have been in the system close to sixteen years and every year had been assured that I would receive a pension upon retirement). However recently, the law was changed and foreign teachers are no longer able to receive the pension (those who have already been working in the system for fifteen, twenty, or more years will NOT be grandfathered in as per previous practice . . . they just lose their pensions). This doesn’t apply to others who had been without a pension under the old system anyway so I know there’s very little sympathy but as one of the folks who had been given assurances and made career and retirement plans accordingly, it still sucks the big one. At least, I’m not one of the folks who are already near retirement with very little to no other options available who just found out they get a fraction of the original retirement package. That sucks even bigger time.
[quote=“Tigerman”]The Council of Labor Affairs has indicated that the new law applies only to Taiwan nationals.
However, a Taiwan company can elect to establish a personal retirement account for foreign employees.
[/quote]
Tigerman or anybody else,
Can you provide me with any written information (Chinese or English) which explains the fact that accounts can be created for foreigners? With the new law set to take effect in three months, the company that I work for is starting to get ready for it.
I have tried to tell them that they can optionally create an account for the foreign employees in our company, but they are sticking to the wording that says “foreigners are excluded from this law”. I have told them that they are interpreting this wording incorrectly, and that the wording simply means that it is not required to set up accounts for foreigners, but they don’t seem to believe me. The HR lady said she would try to call the labor department, but I don’t think she’s found out any answer on this yet.
This issue will affect a great many of us here, so the more information we can provide in this thread, the better it should be for everybody.
Thank you very much,
Scott
I just asked for confirmation/clarification re this issue and received some conflicting information from the gal who knows what is going down. Unfortunately, she was heading out of the office for the day and we couldn’t discuss much. I will attempt to speak with her again tomorrow.
Stay tuned.
Is this it ?
I can’t see where it mentions foreigners, or am I missing it. No other parts of the Labor Standards Law seem to apply to me anyany 
Yes, our HR person cited Article 7. It only mentions Taiwanese (domestic) employees.
As far as I know, if you pay a monthly Labor Insurance fee, then this new pension plan is something you should be concerned about.
You’re correct that unlike the existing mandatory retirement pension scheme, the new system doesn’t require coverage for foreigners (not that it makes much difference as compared to the existing system, because almost no one local or foreign qualified for a pension under the existing scheme, because of the 15 or 25 year vesting period). Nor do professionals such as doctors, lawyers or accountants receive mandatory coverage under the new scheme, although non-professionals who work for them may be eligible. On the other hand, the new law covers hourly, contract and temp workers, which the existing law doesn’t.
But the law does authorize employees to contribute up to 6% on their own and it does permit employers to contribute more than 6% if they wish and I read somewhere that employers may choose to provide voluntary coverage for exempt employees if they wish, which seems consistent with those other provisions, but I don’t have a legal citation for that.
If what you’re looking for is not mentioned in the new Labor Pension Act itself, and I think it isn’t, it’s possible it may be mentioned in the Enforcement Rules that the Council for Labor Affairs issued in February (I think) for the new Act. Or, it’s possible the CLA has made a statement on some other occasion regarding that subject, because there are a few other uncertainties that remain concerning the Act, which the CLA needs to promptly address, because the Act is scheduled to become effective July 1.
If you speak/read Chinese, I recommend visiting the CLA website and/or contacting them by phone for the most direct info on the subject.
I just spoke with our attorney involved in this matter and she basically said what MT said above.
Just a few notes:
As stated, the new Law does not apply to or otherwise cover foreign nationals.
Employers are permitted (although it says nothing about this in the Law and thus the permission exists because no prohibition exists) to establish similar type funds for their foreign national employees.
However, the Law provides that the funds created under this Law (for Taiwan national employees) will be established so that a certain amount of interest will be paid thereon, and that the Central Government will guarantee that rate of interest.
If a company establishes a similar type fund for its foreign national employee/s, the Government will not guarantee any particular rate of interest on the same. However, there is nothing in the Law that prohibits the company from providing a guarantee re a particular rate of interest.
Thanks to both of you guys. Hopefully the HR woman will come around and agree, or another arrangement can be made. I guess we will all have to fight this battle individually.
I hope you guys will have more luck with this pension plan than I am having with the company I work for. I got an email from HR today, and it says:
[quote]I recheck “Labor Pension Act” and call the Bureau of Labor Insurance that told me foreign employees couldn’t participate the new pension plan even they or their employer are voluntary.
[/quote]
The good thing is, my boss is a pretty fair guy, and he’s going to give me money that’s comparable to what everybody else is getting. The only real difference seems to be that I will not get the tax benefits that everybody else is getting. All in all, I guess I can’t complain too much, though. It might even turn out to be better this way.
The main thing is, I’m married to a Taiwanese citizen, have full work rights, but this is another way in which foreigners are treated differently. I’m pretty sure that even permanent residency would not help in this matter. Of course, I could always become a Taiwanese citizen, but it seems like some of these retirement benefits could/should be extended to non-Taiwanese.
Hopefully some guidelines will be established, or the law amended, to clearly state what should be done for the retirement accounts of foreign employees. Otherwise, I’m afraid the great majority of us will be out of luck.
Your boss does sound very decent.
I’m not the least bit surprised by what your HR person said, but I wouldn’t accept that as the truth based on that person’s statement. I would think most employees at the Council for Labor Affairs and Bureau of Labor Insurance – who should know the law and related rules – are still thorougly confused, and the nation’s corporate HR people, being one step further removed, must be totally clueless. Maybe a year from now people will understand how it works.
In any event, glad it worked out for you. 
Having studied electrical engineering, I like to describe situations like this as “following the path of least resistance”. I think that’s what the CLA people are doing…just giving the easiest answer, even if it’s not fully complete. Anyway, you are right. I should count my blessings. I think with time more information will come out, and eventually I might be treated the same as my Taiwanese colleagues.
[quote=“scomargo”]I got an email from HR today, and it says:
[quote]I recheck “Labor Pension Act” and call the Bureau of Labor Insurance that told me foreign employees couldn’t participate the new pension plan even they or their employer are voluntary.
[/quote][/quote]
It seems as though there is a failure to communicate.
However, it also seems that your boss is a good guy.
Anyway, your HR girl doesn’t seem to understand that we already know that foreign nationals cannot participate in the new plan under the law… the idea, however, is that individual companies are not prohibitted from establishing similar type plans for their foreign employees… though of course they cannot do anything about the taxes or the government guarantee re the interest rate payable.
Foreigners are probably being excluded since the government doesn’t want to have to pay migrant laborers pensions.
But this is actually a hidden incentive to hire foreigners since it costs six percent more to hire Taiwanese folks.
Permanent residency does not get you in on the pension plan.
Foreigners definitely do not receive mandatory coverage under the new law. The question is whether an employer may decide to voluntarily include a foreigner out of the goodness of his or her heart.
We all believe the answer is yes, but scomargo’s HR person believes the answer is no. The new pension law doesn’t go into effect till July 1 and there is still lots of confusion concerning it, including in the agencies responsible for administering it.
Incidentally, one thing the govt tossed out as consolation to employers for the higher pension costs is that severance pay requirements will be cut in half for any employees who are eligible for severance pay due to termination and are also covered by the new pension plan.
[quote=“Mother Theresa”]Foreigners definitely do not receive mandatory coverage under the new law. The question is whether an employer may decide to voluntarily include a foreigner out of the goodness of his or her heart.
We all believe the answer is yes, but scomargo’s HR person believes the answer is no. The new pension law doesn’t go into effect till July 1 and there is still lots of confusion concerning it, including in the agencies responsible for administering it.
Incidentally, one thing the govt tossed out as consolation to employers for the higher pension costs is that severance pay requirements will be cut in half for any employees who are eligible for severance pay due to termination and are also covered by the new pension plan.[/quote]
According to my HR woman, foreigners are not allowed to open an account for retirement payment at the government agency… Only R.O.C. nationals with an ID card can get an account.
Now what? I’m kinda fuming right now :fume: I’d like to protest somehow and take this issue into public… at least foreigners who are married with a local should have the same right like everyone else on this matter… (as well as on some other matters… for example receiving company stocks :fume: )
Does anyone have good contacts to local lawmakers? Should we stage a demonstration? 