Gov­ern­ment out­lines pub­lic pen­sion re­forms

China Daily (Canada) - - FRONT PAGE - By XU WEI xuwei@chi­

The cen­tral gov­ern­ment un­veiled its long-awaited plans for pen­sion re­form on Wed­nes­day for the coun­try’s 40 mil­lion gov­ern­ment and pub­lic in­sti­tu­tion staff mem­bers in a move to fur­ther en­sure so­cial equal­ity and cope with its ag­ing pop­u­la­tion.

The new pen­sion sys­tem, made pub­lic on the State Coun­cil’s web­site, stip­u­lates that mem­bers of gov­ern­ment and pub­lic in­sti­tu­tions must pay for their pen­sions to­gether with their em­ploy­ers.

The re­form is aimed at es­tab­lish­ing a more fair and sus­tain­able pen­sion sys­tem, the no­tice said, and comes after more than two decades of a dual pen­sion sys­tem un­der which gov­ern­ment and pub­lic in­sti­tu­tion em­ploy­ees did not need to pay for their re­tire­ment plans.

“That old pen­sion sys­tem is un­fair. Cor­po­rate re­tirees have to pay for their own pen­sion plans, but they re­ceived less when they ac­tu­ally col­lected their pen­sions,” said Lu Quan, an as­so­ciate pro­fes­sor on so­cial se­cu­rity at Ren­min Univer­sity of China.

In 2013, the av­er­age monthly pen­sion for cor­po­rate re­tirees was about 1,900 yuan ($307). Pen­sions for re­tirees from pub­lic in­sti­tu­tions were 1.8 times that, while gov­ern­ment re­tirees re­ceived 2.1 times, Xin­hua News Agency re­ported.

The cen­tral gov­ern­ment has in­creased the pen­sion of cor­po­rate re­tirees 10 times since 2005 to en­sure their liveli­hoods.

Lu said the re­form will en­sure the fair­ness of the coun­try’s pen­sion sys­tem.

Vice-Premier Ma Kai said dur­ing a re­port to the bi­monthly ses­sion of the Na­tional Peo­ple’s Congress Stand­ing Com­mit­tee last month that the pen­sion re­form will be car­ried out with re­forms to the salary sys­tem of civil ser­vants and staff of pub­lic in­sti­tu­tions.

Ma said that the high per­cent­age of wages go­ing to so­cial se­cu­rity funds — as much as 40 to 50 per­cent — has been a ma­jor bur­den to Chi­nese en­ter­prises, Beijing News re­ported.

The coun­try’s quickly ag­ing pop­u­la­tion could pose another chal­lenge to the so­cial se­cu­rity funds, Ma said.

In 2013, 14.9 per­cent of the coun­try’s pop­u­la­tion was aged 60 or above. That could in­crease to 19.3 per­cent by 2020 and 34.2 per­cent by 2050, he said.

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