Taiwan’s LPF closes in on member choice
27 February 2014
News, Asia, Global, Taiwan
By Hui Ching-hoo
The Labor Pension Fund’s (LPF) eagerly-anticipated member choice platform is expected to be implemented by as early as 2015 following Taiwan’s Ministry of Labor and Ministry of Finance announcing they were working on details pertaining to the scheme’s tax reporting mechanism, claims a report from the Commercial Times.
The amended bill will be submitted to the Legislative Yuan for approval in the second half of this year. The scope of the eligible financial products will then be thrashed out.
The member choice scheme will be carried out in phases. In the first phase, employees will be expected to fork out an additional 6% in voluntary contributions if they want to participate in it. The second phase will cover the contributions from employers.
Under the current system, contributions to the LPF are placed in accounts overseen by the Labor Pension Fund Supervisory Committee (LPFSC). The guaranteed return is equivalent to two-year time-deposit rates at somewhere between 1.3% and 1.4%.
The member choice scheme is expected to broaden the investment choices of retirees in anticipation of the scheme embracing a variety of assets such as RMB deposits, US deposits, as well as fund and insurance products.
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