- Instead of receiving a lump-sum payment on retirement, retirees will receive regular pension payments. However, insureds who participated in the plan before the new law came into effect will be able to decide between a lump sum and a pension.
- Pension eligibility is currently at 60, and will remain at this age until 2017. It will then increase by a year every 2 years until it reaches 65 in 2026.
- Insurance premiums will rise incrementally until they reach 13% in 2027.
- The ratio of contributions paid by employers, employees and the government will be 70:20:10 respectively. This means that as premiums rise, the effective premium rate paid by employers will rise from 5% to just over 9% by 2028.
Over 8 million insured workers will be affected by this change. The new law is expected to have a positive impact on retirement by providing more flexible and simpler plans, with larger benefits. It will involve employers in higher costs, however, adding to pressures to find more efficient employee benefit solutions.
For more information, please visit www.khltw.com