Mixed response to Taiwan’s LPF member choice scheme, survey reveals
08 May 2014
Category: News, Asia, Global, Taiwan
By Hui Ching-hoo
The Taiwanese government’s plan to launch a member choice platform for the island’s largest pension fund has been met with a mixed public response, with nearly half of all members indicating their preference to stick with the existing system, according to research.
Authorities are set to implement the member choice platform for the Labor Pension Fund (LPF) from as early as next year, with members expected to fork out an additional 6% if they wish to participate.
The survey by the Securities Investment Trust & Consulting Association (SITCA) found that 47% of respondents preferred to stick with accounts overseen by the Bureau of Labor Funds (BLF), even though the guaranteed return is equivalent to a two-year time-deposit rate of somewhere between 1.3% and 1.4%.
The poll of 1,622 people aged between 20 and 62 years old did find, however, that 49% of respondents said that they were willing to bear any potential risks of the new member choice system.
In addition, 81% of the respondents said that they were concerned the returns delivered by the LPF and Labor Insurance Fund would not be sufficient to address their retirement needs.
SITCA added that Taiwan’s government needs to put more effort into promoting education if it is to entice more people to join the new scheme.