Chapter II Contributions to the Retirement and Compensation Fund
Within two months from the beginning of each semester, private schools shall make staff retirement, bereavement compensation, resignation, and severance reserve fund contributions to the Fund Management Committee in accordance with the following provisions:
1.Private schools at the senior secondary school level and above (i.e. including private colleges and universities): contribute an amount equivalent to three percent of their tuition.
2.Private elementary schools and private junior high schools: contribute an amount equivalent to 2.1 percent of their miscellaneous fees.
The Fund Management Committee shall remit two-thirds of the contribution amount specified in the preceding paragraph into the school fund reserve account of each particular private school, to act as a reserve for its monthly contributions to the Fund to be made in accordance with the provisions of this Act. The remaining one-third shall be remitted into the former private school retirement fund to be used to pay the retirement, compensation, and severance payments that teachers and other staff are entitled to, based on their years of service before this Act took effect.
If a private school fails to pay its contribution by the deadline stipulated in Paragraph 1 or does not contribute the full amount, an additional late payment fee of three percent of the overdue contribution amount will be imposed each day from the day following the original deadline until the day immediately before the contribution is paid in full. The maximum additional late payment fee that may be imposed is equivalent to double the contribution amount. The revenue from late payment fees shall go into the school fund reserve account of the private school concerned.
The amount of money jointly contributed in accordance with the provisions of Article 4, Paragraph 1 shall be equivalent to 12 percent of double the staff member’s base salary (based on seniority), and the respective proportions to be paid into each individual’s Retirement and Compensation Fund account each month by each of the joint contributors are set out below:
1.The staff member shall contribute 35 percent.
2.The school fund reserve account shall contribute 26 percent.
3.The private school shall contribute 6.5 percent.
4.The competent authority for the school shall contribute 32.5 percent.
If there is any shortfall occurs in the contribution referred to in Subparagraph 2 of the preceding paragraph, the private school concerned shall pay the difference.
The contribution referred to in Paragraph 4, Subparagraph 3 may first be remitted from the reserve funds in the school fund reserve account. At the end of each semester, any surplus remaining in the school fund reserve account may be paid into each individual’s Retirement and Compensation Fund account in a lump sum payment on a pro rata basis, based on each private school staff member’s base salary (based on seniority) and weighted according to the number of days the person worked that semester.
The competent authority for the school shall have the responsibility of making the contributions stipulated in Paragraph 4, Subparagraph 4 for a maximum period of 42 years. For any years of service that exceed this maximum, the remainder of the contributions, apart from the individual contributions to be paid by principals (presidents) or teachers, shall be paid by the private school.
When a civil servant, educator, government worker, member of the military forces, person who worked in a public enterprise, or person who worked in another government position who has already received a retirement (or discharge) pension or payment transfers to take up a teaching or other staff position in a private school, the private school shall be responsible for paying the contribution of the competent authority for the school stipulated in Paragraph 4, Subparagraph 4.
If a staff member has been employed for less than a full month, the contribution to be made is calculated from the person’s actual salary income as follows: take the base salary (based on seniority) at that staff member’s pay level, divide it by the number of days in that month, and multiply the resulting figure by the actual number of days he or she has been employed.
A staff member who considers that an error has been made by the school where they work(ed) regarding their period of service or the contribution amount(s) shall raise an objection with the school within one month from the contribution date, and request an alteration.
The amount contributed by a staff member in accordance with Paragraph 4, Subparagraph 1 shall not be counted as part of his or her taxable salary in the contribution year.
The retirement, severance, and bereavement compensation payments for a staff member’s years of service before the Retirement and Compensation Fund was established shall be paid from the former private school retirement fund. If there is any shortfall, it may be paid by the competent authority for the school, through a budget allocation, or an annual adjustment within the scope of the annual budget. Such payments are not subject to the restrictions of the provisions of Articles 23, 62, and 63 of the Budget Act.
When there are no longer any teaching or other staff members employed at any private or public school who had any years of service at a private school before this Act took effect, the Fund Management Committee shall remit the full amount of the contributions paid by individual private schools in accordance with the provisions of Paragraph 1 into their respective school fund reserve accounts, and each private school shall handle such matters in accordance with the provisions of Article 9.
A private school shall carry out the procedures required for increasing its contributions to the retirement, bereavement compensation, resignation, and severance pay reserve funds for its staff, and may make such additional contributions to the reserve funds based upon consideration of the school’s financial situation and its major development objectives. A staff member also may make additional contributions to the reserve funds. The amount of such additional contributions that does not exceed an amount equal to the amount required to be contributed under Paragraph 4, Subparagraph 1 of the preceding article shall also not be counted as part of his or her taxable salary in the contribution year.
Any increased contributions to the retirement, bereavement compensation, resignation, and severance pay reserve funds and to the staff reserve funds made in accordance with the preceding paragraph shall be fully disclosed in financial statements, and the Fund Management Committee may be delegated to handle matters pertaining to their revenue and expenditure, management, and utilization.
The Fund Management Committee shall examine and consider the size of the Retirement and Compensation Fund created in compliance with the provisions of Article 8, and design a range of investment portfolios with different returns and risks for staff to choose from. If a staff member has not chosen a portfolio, the Fund Management Committee shall allocate the contributions for that staff member to an appropriate portfolio based on the age of the staff member. The implementation regulations governing this shall be prescribed by the central competent authority.
Before the offering of a choice of investment portfolios referred to in the preceding paragraph is implemented, the Retirement and Compensation Fund shall be uniformly managed and utilized by the Fund Management Committee.
The return on the Fund during the period of its uniform management and utilization, and the return on an investment portfolio that the Fund Management Committee has rated as having the lowest level of risk after offering a choice of investment portfolios is implemented are not permitted to be lower than the 2-year term deposit rate of local banks. If any shortfall occurs, it shall be made up in full by the National Treasury.
If, after deducting the principal paid into the fund by the staff member and the interest it has earned, the retirement pay, bereavement compensation, or severance payment received by a staff member for years of service after this Act took effect is lower than the standards governing the calculation of retirement pay, bereavement compensation, or severance pay for any years of service before this Act took effect, each respective competent authority shall make up the difference.
If the competent authority for a school or a private school fails to make monthly contributions to the Retirement and Compensation Fund for its staff in accordance with the provisions of this Act, or fails to contribute the required amounts in full, thereby causing any staff member to suffer a loss, it shall be liable for damages. This shall not apply, however, if the failure is due to a cause not attributable to the competent authority for the school or to the private school.
The right to lodge a claim referred to in the preceding paragraph shall be extinguished if not exercised within two years from the time that the staff member discovers the loss, and within five years from the time the loss occurred.