TAIWAN - Taiwan's US$3.4bn public sector pension fund will soon be open to stock market investment and foreign currency deposits after the recent pension bill set up a management commission to supervise its assets.
Currently all assets are held in bank accounts and at the mercy of interest rates. By the end of January funds had only grown by $7.98m.
Council of Labour Affairs Chairman Lee Ying-yuan said: “I am confident that the return on investment will be as high as 4%, twice as high as the interest rate on time deposit savings over two years.”
If predictions proved correct, retirees’ monthly payments would grow from $170 to around $370.
The pension scheme, which was created on July 1, 2005, has more than one million members and represents 77% of all domestic workers.
Employers pay contributions equal to 6% of workers’ salaries. The scheme is transferable and pays out on retirement age of 60.
The 21 member commission will take over management of the fund in around six months’ time.
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