In 20 years time, the labor insurance program for the 9.41 million private employees may go bankrupt.
This was seen after their estimated deficit went from NT$3.13 trillion to NT$5.5 trillion. The increase in debt appears to be the result of a new policy that now offers a life-long pension instead of one lump-sum old-age payment to an insured retiree.
The labor insurance program entails a 6.5 percent premium rate while the new system requires an increase 23.84 percent. But even if the program rises to the 12 percent rate ceiling allowed by the current rules, it will still not cover up the deficit and will eventually lead to a huge one according to officials and experts.
This projection was opposed by the Council of Labor Affairs (CLA) saying that the program is still viable and that assumptions on future payment and death rate can affect the situation on hand.
However they are to consult and refer with various experts to discuss issues and then confer with the Council for Economic Planning and Development (CEPD) to draw up future plans.
Labor organizations are quick to point out that the government added NT$300 billion to the retirement pension fund of the public civil servants, which are less in number than the private ones, to augment its finances in the last several years.
Most government takes preventive measures to curb up deficit in similar social security programs. This includes raising the insurance premium rates required to cover up deficiencies, lowering the payment to be given to avoid deficits and budget over-run, or extending the mandatory retirement age of employees to add productivity and increase income.
