Profits posted by labor pension and insurance funds set benchmark

By Ted Chen, The China Post

TAIPEI, Taiwan — The government-run labor pension and insurance funds yesterday posted record high earnings in July, propelled by gains in the European, U.S., and Chinese markets, according to governing bodies.

In July, profits reached NT$7.3 billion for the labor insurance fund, while the labor pension fund netted NT$19.09 billion in gains.

In the first seven months of this year, the labor insurance fund accumulated profits of NT$15.74 billion, with the labor pension fund accumulating profits of NT$46.42 billion. Most notably, as of July this year, the new version of the labor pension scheme, which came into effect in 2005, has since reached a scale exceeding NT$1 trillion. Policy observers stated that governing bodies are poised to face greater challenges as publicly run funds grow in scale.

The Labor Insurance Supervisory Commission attributed the July windfall to market surges observed throughout Europe, the U.S., and China, spelling the beginning of a global economic recovery. The commission stated that the U.S. economy is showing signs of recovery, with the purchasing managers index (PMI) reaching 55.4 in August, marking a significant month-on-month growth and a two-year high. Concurrently the unemployment rate decreased to 7.4 percent, marking a four-year low. Europe’s PMI index also rose markedly to 50.3, marking a turn towards growth, a first in two years. China’s PMI in May also reached 50.3, indicating reversal from gloom, propelling many struggling funds into the black.

The commission stated that as of the end of July, both the current and preceding versions of the publicly run funds totalled NT$1.5953 trillion. The current interation contributed NT$1.3 trillion while the proceeding scheme represented NT$594.96 billion.

As of the end of July, total profits of the two funds reached NT$49.62 billion, representing an earnings yield rate of 3.0593 percent, while monthly profits averaging at NT$19.09 billion, said the commission.