Labor groups call for employer pension contributions to rise to 15%

Taipei, Aug. 27 (CNA) Labor groups in Taiwan on Thursday called on the government to raise employers' mandatory pension contributions from 6 percent to 15 percent, arguing that workers have not received a fair share of Taiwan's economic and productivity gains.

"Over the past two decades, Taiwan's workers have created greater economic value almost every year than they did before," Ho Cheng-chia (何政家), chairman of the Taiwan Solidarity Front Confederation of Trade Unions, said at a press conference at the Legislative Yuan in Taipei.

"But the additional profits they generated have not been reflected in their compensation," Ho said, citing a July report by think tank Taiwan Political Economy Collaborative that found the productivity-pay gap had widened further after 2023 with the growth of AI.

If the government really wants to address the problem of corporate profits not being fairly distributed to workers, "the most direct way is to raise employers' pension contributions," Ho said.

He was referring to Taiwan's new labor pension system, introduced in 2005. The new system currently covers about 7.7 million workers, with employers required to contribute at least 6 percent of a worker's monthly wage to an individual pension account.

In contrast, under the previous system, employers set aside 2 percent to 15 percent of wages, depending on factors such as seniority and expected retirements, in a pension reserve fund.

Citing a recent National Audit Office report, Ho said employers contributed an average of just 6.04 percent last year, which he said showed that most employers were contributing only the statutory minimum.

The labor groups called on the government to raise the minimum rate, which has not been changed since 2005, to 15 percent.

Chunghwa Telecom Workers' Union Chairman Teng Ke-lien (鄧克廉) said increasing pension contributions could also serve as a form of deferred pay raise for workers.

"The money is simply received later, and it can provide substantial protection for workers after retirement," Teng said.

The groups also urged the government to help secure meaningful wage increases across state-run, foreign-invested and domestic private companies, arguing that such increases would do more to address long-term wage stagnation than a proposed universal NT$10,000 (US$315) cash handout in 2027.

However, the groups did not specify a target wage increase when asked by CNA, saying it would depend on the industry and individual companies.

Organizers said some unions are preparing or holding strike votes over existing labor disputes while more than 30 labor groups have backed the demands raised at the press conference and are discussing a broader Taipei mobilization in October over wages, pensions and labor rights.