Labor groups urge gov't to raise employer pension contributions

Taipei, Oct. 13 (CNA) Labor groups on Tuesday urged the government to raise the mandatory employer contribution rate under Taiwan's new labor pension system, criticizing authorities for failing to pursue legislative reform despite repeated calls to improve workers' retirement benefits.

The May 1 Action Alliance, a coalition of labor unions and advocacy groups, held protests outside the Executive Yuan and Legislative Yuan in Taipei, demanding that the government submit its own proposed amendments to the Labor Pension Act.

Speaking at the protest, Chiu I-kan (邱奕淦), president of the Confederation of Taipei Trade Unions, said mandatory employer contribution rates under Taiwan's new pension system had remained unchanged at 6 percent for 21 years, despite the expectation of incremental improvements when it was introduced in 2005.

Chiu called for a minimum rate of 12 percent, with the alliance warning retirement savings accumulated under the current rate would be insufficient as wages struggle to keep pace with the rising cost of living.

Taiwan operates two labor pension systems. Under the newer system, introduced in July 2005, employers must contribute at least 6 percent of workers' monthly wages to individual retirement accounts, a minimum rate that has remained unchanged for 21 years.

According to government figures, around 7.87 million workers had contributions made to their accounts under the new system as of July 2026, while an estimated 115,000 workers remained under the old system as of December 2025.

Under the old system, retirement benefits are calculated based on years of service and average wages before retirement.

Chiu also recalled that President Lai Ching-te (賴清德), who took office in May 2024, pledged during his election campaign to encourage higher employer contributions through tax incentives or other measures.

"Even a proposal hasn't been submitted," Chiu said, referring to the government's failure to introduce its own amendment bill.

Meanwhile, Taiwan Workers' Struggle General Confederation Secretary-General Yao Kuang-tsu (姚光祖) said the average employer contribution rate stood at just 6.04 percent in 2025, citing statistics compiled by the Bureau of Labor Insurance.

Yao said it was the "government's responsibility" to ensure higher pension contributions, given unions were already burdened with negotiating wage increases, year-end bonuses and collective agreements with employers.

The alliance also questioned whether lawmakers across party lines had made sufficient efforts to advance pension reform, despite introducing 17 proposed amendments to the Labor Pension Act, including bills seeking to raise mandatory employer contributions from the current 6 percent to between 8 and 10 percent.

The alliance said the bills had only passed their first reading and warned that they could lapse if lawmakers fail to complete the legislative process before the current legislative term ends in January 2028.

MOL's response

In response, the Ministry of Labor (MOL) said it remained open to proposals to raise mandatory employer contributions and would "carefully evaluate" potential changes while continuing to gather opinions from stakeholders.

The ministry said it had introduced incentives to encourage employers to contribute more than the statutory minimum, including incorporating higher contribution rates into environmental, social and governance (ESG) evaluation criteria for listed companies.

It said contribution rates exceeding 6 percent were also used as a bonus criterion for various national awards administered by the MOL's Workforce Development Agency and the Ministry of Economic Affairs.