Intervention in the stock market and loss of the Pension Fund report inaccurate
- Last updated:2021-10-18
Intervention in the stock market and loss of the Pension Fund report inaccurate
|
News From：Department of Labor Standards
|
|
Date：2006-11-07
|
| The Pension Fund intervention in the stock market and a loss of NT 24 billion dollars reported by news on Nov. 7th, 2006 is a misunderstanding about general accounting, which according to the Council is inaccurate. As of the end of September of 2006, accumulated total profit was NT 127.748 billion dollars excluding unrealized loss on valuation of NT 1.573 billion dollars at the end of September, and a surplus profit of NT 7.829 billion dollars at year end. After subtracting annual legal minimum income NT 112.544 billion dollars and partial excess return of NT7.437 billion dollars appropriated by enterprise units, investment performance of the Fund was respectable. NT 2.8 billion dollars was allocated at the end of March in 2006, and there was no loss of the Fund. The general accounting principle applied to accounting for the Pension Fund, and the unrealized loss on valuation is calculated based on the cost or market on the closing date, depending on which is lower. Although the realized profit of the Fund was NT 26.3 billion dollars in 2000, the stock index declined from 8467.37 at the end of 1999 to 4739.09, a drop of 44.03% when the stock market was affected by economic slowdown, thus the Pension Fund listed the unrealized loss on valuation of NT 24.7 billion dollars which has been gradually written off through investment revenues and unrealized loss on valuation each year. The loss in the news report is the unrealized loss on valuation of NT 24.7 billion dollars, listed at the end of 2000 based on the accounting, however, the realized profit of NT 26.3 billion dollars was not mentioned in the report, creating the appearance of loss. The high price fluctuation of stock investment has induced listing loss of parts of individual investment items, therefore, some basic factors, such as industrial future evaluation and business performance of companies shall be considered as rearrangement of holding stocks for stabilized management of the Fund in the long run. Some losses will be inevitable. The Fund traditionally focuses on investment of safe, stable, and profitable items to receive a yearly bonus, and to take opportunities to buy or sell holding stocks to acquire revenues, as a tool to secure and enhance labor welfare. There is no listed loss caused by the investment currently, unrealized profit has accumulated to NT 1.5 billion dollars. The Council will reveal profit calculation of the Pension Fund based on legal, fair, and rational principles to prevent black box work or absence of monitors, by following security guidelines to pursue maximum profits, and professionally maintain Fund management. |
- Source:Department of Standards and Equal Employment
- Publication Date:2006-11-07
- Count Views: