Attention to Middle-Aged and Elderly Over 60! Ministry of Labor New Regulations Implemented on 8/1 'Labor Retirement Fund Regulations Changed', One-Time Look at Payout Modifications

The《Labor Retirement Fund Act Enforcement Rules》, which affects the retirement benefits of millions of workers across Taiwan, has undergone the largest amendment in nearly 20 years. Several new regulations will be implemented in stages by the end of March 2026, with important regulations related to employer obligations coming into effect on August 1. This amendment aims to enhance labor retirement protection and increase the flexibility of the system. It introduces a '30-day reflection period' for retirement fund claims, prohibits employers from refusing voluntary retirement fund contributions, expands protection for heirs, extends the statute of limitations for minors' claims, and increases the responsibility for non-payment, further improving the retirement system. Currently, approximately 13.1 million people across Taiwan have set up individual accounts for labor retirement funds, with about 7.83 million workers subject to mandatory contributions under the new system. The Ministry of Labor hopes that this amendment will make the retirement fund system more aligned with workers' actual needs, increase flexibility in retirement planning, and provide more comprehensive protection for retirement assets. The new labor retirement system will be fully implemented in August 2026! For the first time, a 30-day reflection mechanism and employers cannot refuse voluntary contributions. Here are the five key amendments at a glance. 1. For the first time, a 30-day reflection period is introduced, allowing monthly retirement funds to be changed to a lump-sum claim. In the past, qualified workers could choose between a lump-sum claim or monthly receipt of retirement funds upon retirement. However, once the application and approval were completed, the method of claim could not be changed. The new system adds a '30-day hesitation period' mechanism. If a worker chooses to receive retirement funds monthly, within 30 days from the first retirement fund deposit, they can apply to the Labor Insurance Bureau to change to a lump-sum claim. As long as the first month's retirement fund received is returned, the balance of the personal account can be settled in one go. However, this system only applies to 'changing monthly retirement funds to a lump-sum claim'. If a lump-sum claim is chosen from the beginning, it cannot be changed to monthly receipt later. According to statistics from the Ministry of Labor, shortly after the implementation of the new system, 22 workers have already applied to change their claim method within the 30-day limit, with a total claim amount of approximately NT$36.88 million, demonstrating that the new system has taken effect. 2. From August 1, employers cannot refuse workers' voluntary contributions to retirement funds. The new labor retirement system allows workers to voluntarily contribute 1% to 6% of their salary each month as retirement funds. In addition to increasing the accumulation of retirement funds, they also enjoy tax benefits where the contributed amount is not included in the current year's comprehensive income tax. In the past, some employers refused to assist employees with voluntary contributions on the grounds of cumbersome administrative procedures. This amendment clearly states that from August 1, 2026, employers cannot refuse to accept workers' voluntary contribution applications and must legally deduct and pay on their behalf. If an employer refuses to process the procedure, the worker can directly report to the Labor Insurance Bureau, and the employer is still legally obligated to deduct and pay the contributions. In addition, if an employer fails to pay on time, a 3% late payment fee will be charged for each day of delay, with a maximum of up to one times the amount to be contributed, increasing the cost of illegal behavior. 3. The statute of limitations for minors' claims is extended, and it is calculated from the age of majority. In the past, after a worker's death, heirs had a 10-year statute of limitations for claiming labor retirement funds. In practice, it often happened that minor children, due to their young age, only realized after reaching adulthood that the deadline had passed and lost their claim qualifications. After the amendment of the new system, if the claimant is a minor heir or designated claimant, their 10-year statute of limitations will be calculated from the age of majority, avoiding the impact of age factors on inheritance rights and further protecting the retirement fund claim rights of minors. 4. The scope of retirement fund credit protection is expanded, and heirs' inheritances cannot be seized. This amendment also simultaneously expands the scope of retirement fund credit protection. Originally, the law only protected the retirement funds of workers themselves from being assigned, offset, seized, or provided as collateral. The new system further expands the protected objects to heirs and designated claimants. In other words, even if heirs themselves have debt problems or are subject to court enforcement, the labor retirement funds they inherit by law are still protected, ensuring that retirement funds truly play a role in supporting family life. 5. To prevent malicious non-payment, companies changing responsible persons must still bear joint and several liability for payment. To prevent companies from evading the responsibility of non-payment of labor retirement funds by changing the company's responsible person, the new system also stipulates joint and several liability for payment. In the future, if a company changes its responsible person during the period of non-payment of labor retirement funds, both the former and current responsible persons must bear joint and several liability for payment, and they can no longer evade legal responsibility by changing the registration, thereby protecting the labor retirement fund rights of workers. What are the benefits of voluntarily contributing 6%? Balancing retirement and tax savings. The Ministry of Labor also encourages workers to make good use of the voluntary contribution system. Voluntarily contributing 1% to 6% of retirement funds each month not only increases the accumulation of retirement funds but also enjoys tax benefits where the contributed amount is exempt from the current year's comprehensive income tax. In addition, the contributed amount also enjoys a guaranteed return not lower than the interest rate of a two-year fixed deposit. Even if the investment performance is poor, there is still a minimum return guarantee, which helps to accumulate retirement assets in a stable manner. Financial experts point out that if both spouses in a dual-income household maintain a 6% voluntary contribution for a long time, combined with the compound effect and investment returns, the retirement funds accumulated at retirement may have the opportunity to increase by hundreds of millions compared to those who do not voluntarily contribute, which is very helpful for retirement life protection. How can retirement funds be received more flexibly? Experts suggest making good use of the 30-day reflection period. Experts suggest that workers who are about to retire and still evaluating the method of claim may consider first choosing to receive retirement funds monthly, using the first month to actually experience the living expenses and financial needs after retirement. If it is found within the 30-day reflection period that a larger sum of money is needed, such as medical expenses, mortgage repayment, or other family financial planning, an application can still be made to change to a lump-sum claim, increasing the flexibility of retirement fund use. If you have any questions about the new labor retirement system, claim qualifications, or voluntary contribution regulations, you can consult the Labor Insurance Bureau to confirm your own rights and make good retirement planning.