Taiwan’s BLI moves to soothe jangled nerves
19 October 2012
News, Asia, Taiwan
By Hui Ching-hoo
Taiwan’s Bureau of Labor Insurance (BLI) is attempting to beef up market confidence in the Labor Insurance Fund (LIF) after pension members became jittery following media reports that suggested the pension fund will plunge into bankruptcy in 2027.
Local media said earlier this week that the Council of Labor Affairs (CLA) is looking to raise the labour insurance premium rate above the 13% threshold rate after the fund suffered a total loss of NT$12.4 billion (US$413 million) in 2011.
Nevertheless, the fund’s performance has significantly improved, realising a profit of NT$29.2 billion for the first nine months of this year, though the achievement rate was still some way off the track needed to meet the whole-year return objective of 3.3%.
The BLI said on its website on Friday (October 19) that the number of people enquiring about the pension fund’s financial status rose by 20% following the media reports.
The BLI called on pension members not to withdraw their insurance claims on a one-off basis, countering that the financial status of the LIF is sound. The fund recorded accumulated profits of NT$230 billion, which represents average growth of 4% per annum. The fund’s contributions have been outweighing its withdrawals since 2009.
It added that the pension fund’s management board will work out a proposal to improve its investment performance within three months.
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