New retirement investment options for private school teachers: Full life cycle funds will be extended to age 90 or the end of life

New retirement investment options for private school teachers. The Ministry of Education stated today (23rd) that the new private school retirement savings system has been implemented for more than 16 years and has taken care of 31,637 retirees. From September 30, a new "full life cycle fund" will be added to the independent investment platform of private schools, covering all the time from employment to retirement. Through automatic adjustment of asset allocation and disciplined withdrawals, it is hoped that teachers can continue to invest and withdraw their pensions on a monthly basis after retirement, until they are 90 years old or the end of their lives.

Gu Lanfen, leader of the Private School Retirement Fund Supervisory Committee, explained that the current "life cycle fund" was launched in 2017. People under the age of 37 are allocated to active funds. As age increases, the proportion of steady and conservative funds is gradually increased. Those aged over 62 to 65 are allocated to conservative funds. Conservative funds can be withdrawn after retirement; the new "Full Life Cycle Fund" will allocate all active funds under the age of 40, and then transfer 4% from active funds to conservative funds every year, and allocate all funds to stable funds over 65 years old, continuing until the age of 90 or the end of life.

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According to commissioned research calculations, taking a pure new system university professor with 30 years of experience as an example, the average account at the age of 65 is about 15.149 million yuan. Calculated with a 4.5% withdrawal rate after retirement, the average monthly withdrawal will be about 56,800 yuan. By the age of 90, the account The average household balance is 19.842 million yuan; for pure high school teachers with 30 years of experience in the new system, the average account at the age of 65 is about 12.917 million yuan, and the average monthly income is about 48,400 yuan, and the average account at the age of 90 is still about 16.919 million yuan.

Faculty members who are retiring may also choose life cycle funds. For example, for a high school teacher with 25 years of experience under the new system, the average account balance at the age of 65 is about 8.06 million yuan, and the average monthly income after retirement is about 31,000 yuan. If the account of the retiree does not reach this goal, the pension received from the old system can be deposited into the full life cycle fund, and "increased withdrawals" can be made as early as possible. However, the actual effect will still vary depending on the years of service under the new system and the circumstances of the withdrawal.

Gu Lanfen pointed out that in addition to the private school pension fund, teachers and staff also have the basic protection of public pension annuity. Calculated based on 30 years of service, the public annuities for high school and university teachers are approximately NT$21,700 and NT$24,800 per month respectively. From its establishment in March 2013 to the end of August this year, the average annual returns of the three types of investment portfolios of private school pension funds were 3.49%, 10.35% and 12.81% for the conservative, steady and active types respectively.