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 a business entity is in the process of transferring its labor pension preparatory fund in accordance with Pargarph 2 to Article 15 of the Enterprise Mergers and Acqusitions Act, it shall count the percentage of the number of labor, seniority and wage of the transferred business or property, and then transfer them to and deposit them in the special account of the labor pension preparatory fund of the receving business entity.
Before a business entity is in the process of transferring its labor pension preparatory fund in accordance with Paragraph 3 to Article 15 of the Enterprise Mergers and Acqusitions Act, the amount of its labor pension preparatory fund prepared and allocated shall reach the temporaray prepared and allocsted amount prescibed by Article 5 of the Rules.
When a business entity has paid its labor pension pursuant to the payment standards prescribed by Articles 55 and 84 (Ⅱ) of the Act, and is under no obligation to pay any labor pension, it can report to the competent authority, and after its approval, withdraw the residual amount of money in its labor pension preparatory special account; In the case of no workers remained that are applicable to the labor pension program established by the Act, the same shall be applicable.
When a business suspends its operstion, its labor pension preparatory fund that has already prepared and allocated, in addition to paying for labor pension fund, it may be used as workers' senerance pays. In the case of any residual money, its ownership shall belong to the said business entity.
For the residual money of the labor pension preparatory fund referred to in the preceding paragraph, when a labor pension preparatory fund supervisory committee has not withdrawn it pursuant to Paragraph 1 to Article 6 of the Rules, the said business entity may apply and withdraw them from the designated financial institations.

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.(*)
(* Publicly announced by the Ministry of Interior on May 8, 1986 by the Order of Tai-75-Nei-Lao-Tze-No.397643 to designate November 1, 1986 as the beginning day for business entities to allocate workers' retirement reserve funds.)

The Rules shall become effective on the day of promulgation.