2016-2017

CY Recommendations on Pension Reserve Fund Improve Compliance, Better Safeguarding Workers’ Rights

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Recommendations by the Control Yuan in an investigation report issued last year have led to improved compliance by employers with regulations on labor pension reserve funds, thereby helping to better safeguard workers’ rights.

During its investigation, the CY discovered that central and local government officials in charge of labor affairs had failed to adequately supervise and ensure that employers were acting in compliance with Article 56 of the Labor Standards Act which stipulates that employers shall deposit labor pension reserve funds monthly for employees to whom the Act applies.

According to the investigation report, for the period from 2005 to 2016, a total of 7,919 business enterprises had failed to contribute labor pension reserve funds for the full twelve months in a year, and as of the end of 2016, 8,407 business enterprises had made only partial contributions, leaving a deficit of NT$31.3 billion (US$1.043 billion) that required topping up. Yet, regulatory authorities failed to impose fines, except in 46 cases, with the total fines in these cases amounting to NT$4.23 million (US$141,000). Furthermore, as of the end of February 2017, a total of 51 business enterprises had failed to open a special account for pension reserve funds.

Following issuance of the CY’s post-investigation recommendations to related authorities for better supervision, the situation has improved. By the end of May 2017, the number of business enterprises failing to contribute to labor pension reserve funds for the full twelve months in a year had declined to 6,587. And as of the end of 2017, the number of enterprises depositing sufficient pension reserve funds amounted to 109,000, with the pension contribution rate reaching 97.32%, while the number of business enterprises making only partial contributions had dropped to 3,016. Meanwhile, total contributions for 2017 amounted to NT$112.7 billion (US$3.75 billion), with a deficit of NT$13.3 billion (US$443 million), marking a decline of NT$18 billion (US$600 million) compared with the previous year. In addition, by the start of December last year, all business enterprises had opened a special account for pension reserve funds, achieving the goal of 100% compliance.

Tasked with the responsibility of protecting human rights, the Control Yuan will continue follow-up monitoring of regulatory authorities’ efforts in supervising compliance with related pension reserve fund regulations in order to safeguard workers’ rights, including financial security and dignity in retirement.