These regulations are enacted in accordance with Paragraph 1 of Article 56 of the Labor Standards Act (hereinafter referred to as the Act).
Within the range specified in Paragraph 1 of Article 56 of the Act, each business entity shall determine its ratio of contribution to the Labor Pension Reserve in accordance with the following:
1. The seniority of the workers;
2. The wage structure;
3. The worker turnover rates in the five most recent years;
4. The number of workers retiring in the five upcoming years;
5. The amount of pension funds contributed according to the Regulations Governing Management, Utilization and Allocation of Worker Pension Funds Set up by Profit-Seeking Enterprises prior to applying the Act;
6. Personal insurance taken for the workers prior to applying the Act, provided that the insurance benefits may be used as labor pension reserve funds.
When the accumulated funds appropriated by the business entity are sufficient to pay labor pensions to the workers, the business entity may, through the review and approval of the labor pension reserve supervision committee therein, apply to the local competent authority for ratification to suspend appropriation of contributions to the labor pension reserve.
The labor pension reserve funds of each business entity shall be deposited in an account set up in the name of the labor pension reserve supervision committee of the business entity. The use of such funds shall require the approval of the labor pension reserve supervision committee and the signatures of the employer as well as that of the chairperson or vice chairperson of the committee.
In the event that a business entity suspends operation, and the employer,chairperson, or vice chairperson of the labor pension reserve supervision committee cannot be located or are unable to apply their signatures, and such condition is confirmed by the local competent authority, the funds may be used with the signatures of two thirds of the members of the labor pension reserve supervision committee, said signatures shall be provided within six months after suspension of business operation.
When the funds in the labor pension reserve cannot be used according to the procedure prescribed in the preceding Paragraph after a business entity suspends its operation, the workers may file a claim for execution to request the local competent authority to convene a pension or severance claimants meeting and the local competent authority shall then act according to the resolution achieved at the meeting to request the financial institution in concern to make the payments.
After paying the arrear pensions or severances according to Article 14 of the Regulations for the Management, Repayment, Collection and Allocation of the Arrear Wage Debts, the Bureau of Labor Insurance (hereinafter referred to as the BLI) of the Ministry of Labor may, within the amount of the arrear pensions or severances, present the claim for execution from the workers and request the local competent authority to take the procedure prescribed in the preceding Paragraph.
The local competent authority shall announce or issue notices about the meeting to be convened as specified in Paragraph 2 of the preceding Article and also attend and supervise the meeting. The meeting shall confirm the list of claimants, determine the date on which payments are to be made by the financial institution in concern and also establish the list of workers to receive payments from the labor pension reserve.
Each business entity shall make up the difference when the labor pension reserve is insufficient to pay the pensions of its workers.
When a transferor company or divided company as described in Paragraph 2 of Article 15 of the Business Mergers and Acquisitions Act transfers its labor pension reserve, the data with regard to the workers associated with the operations or assets transferred as well as the lengths of service and wage percentages of the workers shall also be turned over and registered under the account of labor pension reserve of the transferee company.
Before a transferor company or divided company as described in Paragraph 3 Article 15 of the Business Mergers and Acquisitions Act transfers its labor pension reserve, the accumulated contributions to the labor pension reserve shall achieve the amount meeting the threshold for suspension of appropriation of contributions as described in Article 3.
A business entity which has paid labor pensions to its workers according to the criteria set forth in Articles 55 and 84-2 of the Act and need not pay any more labor pensions according to the Act may apply for the local competent authority’s approval to collect the remaining funds in the labor pension reserve account. The same procedure shall apply to business entities without workers subject to the Act.
When a business entity suspends operation, its labor pension reserve funds already appropriated, besides for payment of labor pensions, may be used to pay the severances specified in the Act before paying the severances prescribed in the Labor Pension Act. Any amount remaining shall belong to the business entity.
In the event that the labor pension reserve supervision committee of a business entity is unable to act according to Article 4 and collect the remaining amount in the labor pension reserve account stated in the preceding Paragraph, the business entity may claim the amount from the financial institution.
The pension funds a business contributed according to the Regulations Governing Management, Utilization and Allocation of Pension Funds Set up by Profit-seeking Enterprises before the Act was applicable may be transferred into the labor pension reserve account set up by the business entity according to these regulations.
Local competent authorities and labor inspection institutions may send personnel to audit the contributions appropriated into the labor pension reserve of each business entity and take legal procedures against business entities found in violation of related regulations.
Local competent authorities and the BLI may request financial institutions designated for safekeeping and utilization of labor pension reserve funds to provide related information if deemed necessary.
Each business entity shall establish a statement of amounts contributed to and paid from the labor pension reserve to be reviewed by the labor pension supervision committee within one month after the end of each year.
The central competent authority shall issue an order to set the date on which each business entity is to begin appropriation of contributions to the labor pension reserve according to the Act.
These regulations shall take effect from the day of promulgation.