New Pension Scheme! Government Increases Subsidy, One Group to Receive Extra Payout at Age 65, Yet 70% Fail to Contribute — Experts Identify Key Reason

To provide better retirement security for agricultural workers, the government launched the Farmer Retirement Savings Scheme in 2021, modeled after the Labor Retirement Individual Account system. This policy establishes a dual-layer retirement safety net by combining monthly contributions from both farmers and the government with the existing Elderly Farmer Welfare Allowance. However, the latest audit data released by the Audit Department reveals that participation in the scheme remains low, with as high as 70% of eligible farmers having neither opened accounts nor made contributions. As a result, the Audit Department has urged the competent authority, the Ministry of Agriculture, to promptly review and improve the system.

Under current calculation standards, the contribution amount for the Farmer Retirement Savings is based on the minimum wage. Using last year’s monthly minimum wage of NT$28,590 as a reference, a maximum contribution rate of 10% results in a total monthly contribution of NT$5,718. Previously, the government and farmers each contributed 50%, meaning both parties deposited NT$2,859 per month into individual accounts.

Why are as many as 70% of farmers unwilling to contribute? What incentives has the government introduced?

According to the Audit Department’s analysis of the agricultural insurance registry up to the end of February this year, there are 295,680 insured farmers under the age of 65, of whom 207,565 have not contributed to the retirement savings scheme—approximately 70.2%. To reverse this low participation rate, the Legislative Yuan passed an amendment to the Farmer Retirement Savings Act early this year, adjusting the contribution ratio from a 50-50 split to 60% from the government and 40% from farmers. This new rule took effect retroactively from January 1 of this year. Over a 30-year contribution period, farmers can save up to NT$330,000 in total contributions.

In addition to reducing farmers’ financial burden, the government has also expanded the scheme’s coverage. Previously, only those enrolled in agricultural insurance could participate. Starting this August, the policy has been significantly relaxed: anyone actually engaged in farming—regardless of whether they are covered by labor insurance or the National Pension Scheme—can now voluntarily apply to contribute to the Farmer Retirement Savings, aiming to attract more agricultural workers into the system.

How do grassroots farmers and scholars view this? What are the potential contradictions within the system?

Opinions among grassroots farmers on the current retirement security system vary. According to a report by Renjian Fubao, some farmers argue that existing labor and health insurance already cover most of their protection needs. With rural populations continuing to decline, they suggest government budgets should be directed toward more impactful agricultural policies and that the retirement savings scheme should even begin to be phased out.

Scholars have also raised concerns about fiscal sustainability and policy logic. As reported, Chang Hung-hao, Distinguished Professor at National Taiwan University’s Department of Agricultural Economics and Vice Dean of the College of Bio-Resources and Agriculture, explained that the original intent of the Farmer Retirement Savings was to establish a self-funded savings mechanism. However, increasing the government’s share to 60% effectively expands fiscal subsidies. As elderly farmer allowances continue to rise, the retirement savings scheme must keep increasing subsidies to remain attractive—deviating significantly from the original design of equal contributions. To fundamentally solve the low coverage rate, the elderly farmer allowance system must be comprehensively reviewed so that retirement security for farmers can achieve maximum effectiveness.