History

The Rules are drawn up in accordance with Paragraph 1 to Article 56 of the Labor Standards Act (hereinafter referred to as the Act).

Each business entity shall allocate the workers' retirement reserve fund ranging from two percent to fifteen percent of its total monthly wage payments per month. However, the allocation shall follow the stipulations of the Income Tax Act before it is amended.

The allocation rate for each business corporation shall be formulated by the employer within the scopes mentioned in the preceding article, taking into consideration of the following factors:
1. The seniority of the workers.
2. The wage structure.
3. The labor turnover rate in the current five years.
4. The number of workers who will retire in the next five years.
5. The retirement fund allocated according to the rules for the Safekeeping, Utilization and Disbursement of Employees' Retirement Fund for the Profit-Making Enterprises before the rule become applicable.
6. The life insurance taken for workers before the rule becomes applicable provided that, the benefit payments of which may definitely be used as a workers' retirement reserve fund.

The fixing or adjustment of allocation rate by a business entity shall be reported to the local competent authority for approval and registration.

When the retirement reserve fund is accumulated enough to pay for the workers' retirement pensions of the business entity, it may, after obtaining the approval of its supervisory committee of workers' retirement reserve fund, request the local competent authorities to approve the temporary suspension of such allocation.

The worker's retirement reserve fund shall be deposited in a special account of a designated financial institution in the name of the supervisory committee of worker's retirement reserve fund of the business entity. For disbursement, the signatures of the employer, the chairman, and the vice-chairman of the supervisory committee of worker's retirement reserve fund of the business entity shall be obtained.
In the event that a business entity ceases operations, and if the employer, the chairman and the vice-chairman of the supervisory committee of worker's retirement reserve fund are unavailable or are unable to sign for disbursement, then following verification of the situation by the local compent authority, a two-thirds majority of the members of the supervisory committee shall, within six months after the cessation of operations, sign to authorize disbursement.
In the event that a business entity ceases operations, and the disbursement of the worker's retirement reserve fund cannot be accomplished in the manner described in the preceding paragraph, compensation in the form of IOUs shall be distributed by a designated financial institution upon request from a local competent authority and in accordance to the date set by a conference comprised of those concerned with severance and retirement payments.
The above-mentioned conference shall be convened and presided by the local competent authority following public notification. The conference shall draw up the name list of applicants seeking compensation, determine and designate respectively the date of disbursement and the financial institution responsible for disbursement, prepare payment lists for the labor retirement fund and other related matters.

In the case that the workers' retirement reserve fund allocated by a business entity is insufficient to pay for workers' retirement pensions, the business entity concerned shall make up for the balance.

When business entities transfer their workers' retirement reserve funds pursuant to Paragraph 2 to Article 15 of the Enterprise Merger and Acquisition Act, they shall transfer the funds to the labor retirement reserve funds of the receiving business entities in accordance with the proportion of the number of workers involved, their seniority years and wages of the transferred businesses or properties.
Before business entities transfer their workers' retirement reserve funds pursuant to Paragraph 2 to Article 15 of the Enterprise Merger and Acquisition Act, the allocated workers' reserve retirement funds shall reach the amounts of the temporary suspension of such allocations as stipulated by Article 5 of the Rules.
In addition to paying retirement for workers, business entities may also utilize the retirement reserve funds they have already been allocated as severance payments for their workers in case of suspension of their operations. When business entities transfer their workers' retirement reserve funds pursuant to Paragraph 2 to Article 15 of the Enterprise Merger and Acquisition Act, they shall transfer the funds to the labor retirement reserve funds of the receiving business entities in accordance with the proportion of the number of workers involved, their seniority years and wages of the transferred businesses or properties.

Prior to the promulgation and implementation of the Act, the retirement fund allocated according to the rules for the Safekeeping, Utilization and Disbursement of Employees' Retirement Fund for the Profit-Making Enterprises may transfer in the manner pursuant to the stipulations of the Rules, to the special account for the deposit and utilization of the worker's retirement reserve fund of the business entity.

The local competent authorities or labor inspection agencies may send personnel to inspect the condition of the allocation of retirement reserve funds of different business entities. In case of violations of related provisions are discovered, it shall be duly processed in accordance with the relevant stipulations.

In case of necessity, the local competent authorities may request the designated financial organization responsible for the allocation and management of workers' retirement funds to supply related information.

Within one month after the end of each year, the business entities shall prepare the allocation and disbursement account of workers' retirement reserve funds, and submit them to the supervisory committees of workers' retirement reserve fund for examination and approval.

The beginning day for the allocation of workers' retirement reserve funds of different business entities according to the stipulations of the Rules shall be decided by an administrative order of the Central Competent Authority.

The Rules shall become effective on the day of promulgation.