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Amendments to Enforcement Rules of the Labor Pension Act
Amendments to Enforcement Rules of the Labor Pension Act
Susan Lo/Gloria Chu
The Ministry of Labor has recently amended certain provisions of the "Enforcement Rules of the Labor Pension Act," aiming to allow employees who did not switch to the new pension scheme and have continued applying the old pension scheme till now to voluntarily make pension contributions. The amended provisions took effect on July 17, 2026. The key points of the amendments are as follows:
1. Employees under the old pension scheme may voluntarily contribute to their pension up to 6% of their monthly salary.
Employees under the old pension scheme who wish to make voluntary contributions to their pension within 6% of their monthly salary may notify their employers. The employers will then have to apply to the Bureau of Labor Insurance, the Ministry of Labor to open an individual pension account for the employees (the “Individual Pension Account”) and deposit such contributions into the Individual Pension Account (see Article 21-2 of the Enforcement Rules of the Labor Pension Act).
2. Employees enrolled in the old pension scheme may, by mutual agreement with their employers, settle their pension benefits early and transfer the settled pension benefits into their Individual Pension Accounts.
If employees enrolled in the old pension scheme meet the retirement requirements set forth in Article 53 or Article 54 of the Labor Standards Act and wish to make voluntary contributions to their pension, the employees and employers may, upon reaching a written agreement, settle the pension benefits under the old pension scheme early during the term of the employment and transfer the full amount of such benefits into the employees’ Individual Pension Accounts (Article 21-3 of the Enforcement Rules of the Labor Pension Act).
Unless the employer and employees have entered into an agreement that is more favorable than the Labor Standards Act, the aforementioned pension under the old pension scheme shall be calculated at the maximum of 45 base units (Paragraph 1, Article 21-4 of the Enforcement Rules of the Labor Pension Act).
3. If employees enrolled in the old pension scheme continues to work for the same employer after the pension benefits have been settled, the employer must still pay the pension benefits in accordance with the provisions of the old pension scheme; however, both parties may agree to settle the pension benefits on a year-by-year basis.
Even if both parties have settled the pension benefits in advance, if employees continue to work at the same employer, the employees’ years of service will continue to accrue. Upon the employees’ retirement, the employer shall settle the employee’s pension benefits in accordance with the old pension scheme and pay the difference; or, during the term of the employment, the parties may mutually agree to settle the amount annually and transfer the full amount into the employees’ Individual Pension Accounts. (Paragraphs 1 and 2, Article 21-4 of the Enforcement Rules of the Labor Pension Act)
The primary rationale behind the amendments is that the new pension scheme in Taiwan is currently generating strong returns. To enhance employees’ financial security and help them accumulate more pension funds, while reducing the employers’ costs in managing pension benefits. In sum, the amendments aim to allow employees to voluntarily choose to contribute to the pension fund and, upon mutual agreement between both parties, to settle their pension benefits under the old pension scheme and deposit such benefits into the Individual Pension Accounts, which will enable the funds to be invested through the fund of the new pension scheme, ultimately creating a win-win situation for both employers and employees.
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