Taiwan’s LPF members downbeat on reforms
05 August 2014
Category: News, Asia, Global, Taiwan
By Hui Ching-hoo
The majority of Taiwan’s Labor Pension Fund (LPF) members lack confidence on the ‘member choice platform’ reform that is scheduled to be introduced to the pension fund’s defined contribution (DC) New Scheme between 2015 and 2016.
Citing a survey conducted by Schroders Securities Investment Trust Enterprise (Schroders SITE), Commercial Times reported that the asset manager interviewed 816 members of the retirement scheme aged between 30 and 55.
Nearly three-quarters (73.8%) of the respondents said that they do not have confidence in the current pension system. Almost two-thirds (63.1%) found the new system unreliable and are reluctant to make the voluntary contribution to the member choice platform.
Among those respondents that claimed they were reluctant, 33% said they do not trust the government system. Close to a quarter (24.2%) said they did not have spare money for additional contributions, while 18.9% said they were not confident in the investment process overseen by the government.
Under the member choice platform initiative, LPF members will be expected to fork out an additional 6% in voluntary contributions if they want to participate. The second phase will cover contributions from employers. The bill will be submitted to the Legislative Yuan body for approval later this year.
Chen Ding-yuan, vice-chairman of Taiwan’s Pension Fund Association, previously told Asia Asset Management that the fund pool that will be created by the additional contributions is estimated at somewhere between NT$120 billion (US$4.02 billion) and NT$130 billion per annum.