Taiwan’s trial universal defined-contribution retirement plan is scheduled to launch on July 31 and there is no longer a limit on the number of members, provided they sign up by the deadline.
The two-year trial was initially restricted to 10,000 members when applications opened in April.
But 69,000 have since signed up and the limit has been scrapped, according to a spokesperson for the Taiwan Depository & Clearing Commission Corporation (TDCC).
“The deadline for public application is July 30. The scheme will become operational the following day,” the spokesperson tells Asia Asset Management.
During the trial period, members are required to contribute at least NT$3,000 (US$97) every month to their pension accounts via FundRich Securities, the digital trading unit of TDCC. The money will be invested in the fund of their choice, based on their risk tolerance.
There are nine funds available – six target risk funds and three target date funds. Allianz Global Investors Taiwan, Capital Securities Investment Trust Corp, and Cathay Securities Investment Trust Co have been appointed to oversee the funds.
Members can withdraw their contributions without paying service charges when the trial ends, or retain the money in their accounts.
The trial run was announced by the Financial Supervisory Commission, the Securities Investment Trust and Consulting Association, TDCC and FundRich Securities late last year to promote retirement savings in Taiwan.
According to Sherman Lin, chief executive officer of FundRich Securities, the influx of applicants shows that the public has become more cautious about saving for retirement.
“The programme takes reference from the mechanism of [the Retirement and Compensation Fund for Private Schools]. We will regularly review its investment performance and risk to ensure that the programme will operate smoothly,” Mr. Lin says in a statement on July 6.
The Retirement and Compensation Fund for Private Schools is Taiwan’s first defined-contribution retirement plan. Its members comprise over 50,000 private school teachers and staff on the island.