Labor funds make minor gains in February: council

By Ann Yu,The China Post

TAIPEI, Taiwan — The Labor Insurance and Pension Funds posted gains of NT$26.2 billion and NT$8.3 billion respectively in February, for a minor combined return on investment of 1.78 percent, according to the Council of Labor Affairs.

The council commented that the minor increase was due to the impact of the recent U.S. automatic spending cuts row and the quantitative easing measures that have shaken the global stock market. In January the Labor Pension Funds gained roughly NT$22 billion and the Labor Insurance Funds NT$7.2 billion. This means, the council said, that the profits in February posted only a small combined increase of NT$5.5 billion. The Labor Pension Fund Supervisory Committee (LPFSC) explained that the economic environment was still climbing higher at the beginning of the year, when most country’s financial conditions were recovering and enterprises posting bullish earnings. This contributed to the profitable outcomes of the funds in January.

The committee said it believes that the funds’ performances will improve as the U.S. stock markets gradually stabilize. It added that European Central Banks indicators suggest that global economic conditions should improve in the second half of the year.

The Labor Insurance Funds currently has an asset size of NT$477.8 billion, while the Labor Pension Funds holds NT$1.5 trillion in asset size.

Recent labor fund talks have centered on the possibility they could go bankrupt in the near future. According to the CLA, the Labour Insurance Fund may begin to see a deficit in 2017 and go bust by 2027.

In response the government has begun drafting a reform plan involving an increase in premium rates and a decrease in monthly pension collection. Though the reform plan has not yet been finalized, the Cabinet has been holding numerous discussions across the country to hear different opinions before sealing the deal.