Department of Labor

The current labor retirement system is divided into two parts: the Labor Standards Act (the old pension system) and the Labor Pension Act (the new pension system). Taiwanese workers who began employment before July 1, 2005, whether they chose to continue under the old system or opted for the new system while retaining their rights under the old system, are subject to the retirement provisions of the Labor Standards Act. Additionally, foreign nationals—excluding those covered by Article 46, Paragraph 1, Subparagraphs 8 to 10 of the Employment Service Act—are subject to the retirement provisions of the Labor Standards Act. This group includes: foreign spouses employed before January 17, 2014; foreign professionals hired and granted permanent residency under the Act for the Recruitment and Employment of Foreign Professionals before February 8, 2018; and foreign workers with permanent residency status hired before May 17, 2019.

Where an employer hires employees who are subject to the retirement provisions of the Labor Standards Act, the employer is legally required to establish a Supervisory Committee for Labor Retirement Reserves. The employer shall allocate, on a monthly basis, an amount equal to 2% to 15% of the total monthly wages of such employees into a designated labor retirement reserve account. Additionally, at the end of each year, the employer must assess whether the balance of the labor retirement reserve account is sufficient to cover the estimated retirement payments for the following year, including both voluntary and mandatory retirements. If there is a shortfall between the estimated required amount and the account balance, the employer shall make a one-time contribution to cover the shortfall by the end of March of the following year, and submit the assessment to the enterprise’s Supervisory Committee for Labor Retirement Reserves for review. The employer must ensure that monthly contributions are made in full and in compliance with the relevant legal requirements.

Under the retirement provisions of the Labor Standards Act, retirement is categorized into voluntary retirement and mandatory retirement. Workers may apply for voluntary retirement if they meet any of the following conditions: have worked for the same employer for 15 years or more and are at least 55 years old; have 25 or more years of service regardless of age; or have worked 10 or more years and are at least 60 years old. The current mandatory retirement age is 65, although employers and employees may negotiate a later retirement age. Additionally, if an employee is deemed incapable of performing their duties due to physical or mental disability, the employer may, in accordance with the Act, initiate mandatory retirement. In both cases of voluntary and legally mandated retirements, the employer is required to calculate the retirement payment in accordance with the law and disburse it within 30 days.

For regulations concerning the old pension system, please refer to Articles 53 through 58 of the Labor Standards Act. Additionally, if employees need to estimate their pension benefits under the old system, they may consult the Ministry of Labor’s online pension calculator for seniority under the Labor Standards Act (old pension system), available at: https://calcr2.mol.gov.tw/labor_retire.