Taiwan: Compulsory Occupational Pensions Still Dominate

Abstract

The compulsory occupational pension and insurance system, along with personal savings and family supports, form the backbone of social security in Taiwan. Due to the relatively low contribution ratio, public sector pensions, as well as private sector pensions, are seriously under-funded, and this will lay enormous pressure on future government budgets if reforms are not implemented soon. The new Labor Pension Bill will make drastic policy shifts from defined benefit to defined contribution, from non-portable to portable, and finally from government management of funds to partial private management.