The Taiwan High Court rendered the 103-Lao-Shang-Yi-70 Civil Decision of February 3, 2015 (hereinafter, the "Decision"), holding that for workers subject to the Labor Standards Law who opted for the new labor pension system after the Labor Pension Statute came into effect, their years in service prior to the application of the new labor pension system should be retained, and when the labor contract is terminated in accordance with Articles 53 and 54 of the Labor Standards Law, the pension for the retained years in service should be calculated by the employer based on the average wage at the time of contract termination.

According to the facts underlying the Decision, the Appellee asserted that he was an operator hired by the Appellant on September 1, 1992.When he opted for the new labor pension system in February 2006, the Appellant handled the formalities for the surrender and participation of labor insurance and made monthly pension contribution to the dedicated pension account opened at the Labor Insurance Bureau. Both parties agreed to settle the old years in service by a settlement standard lower than that stipulated in Labor Pension Law. Later on November 25, 2013, when he had worked for 21 years and reached 59, he met the requirement for voluntary retirement under Article 53, Paragraph 1, Subparagraph 1 of the Labor Standards Law. The Appellee agreed to the retirement application. However, the pension for the Appellant's years in service (13 years, 5 months and 22 days to be exact) between September 1, 1992 and February 22, 2006 was underpaid. As a result, the Appellant filed suit for reasons such as pension calculation under Article 55 of the Labor Pension Statute.

According to the Decision, Article 11, Paragraphs 1 through 3 of the Labor Pension Statute provides that workers subject to the Labor Standards Law who opted for the pension system under such statute after the effective date of the Labor Pension Statute, the years in services before the Labor Pension Statute applied shall be retained. When a labor contract is terminated in accordance with Articles 53 and 54 of the Labor Standards Law, the employer shall calculate the pension for the retained years in service based on the average wage at the time of contract termination and pay the same within 30 days upon termination of the contract.

It was further pointed out in the Decision that if employers and employees agree to settle the retained years in service according to a payment standard lower than that in Article 55 and Article 84-2 of the Labor Standards Law, the legal effect of settling the years in service under Article 11, Paragraph 3 of the Labor Pension Statute is not established, and the years in service of the employees before the statute applied shall still be retained in accordance with Paragraph 1 of the same article

It was further held in the Decision that since the settlement of the years in service under the old system between the parties was not effective, the Appellee's right of claim over the old-system pension should begin on the day following his retirement. In addition to the demur that the previous payment agreed upon between the parties may be offset, the shortfall shall still be paid to the Appellee. This Decision is final and is not appealable.