Distinction in travel journalism
Is independent travel journalism important to you?
Click here to keep it independent

25 Dec, 2014

China Focus: 40 mln employees face pension reform

BEIJING, Dec. 24 (Xinhua) — About 40 million members of government, Party, and public institution staff will be affected by the reform of China’s pension system.

China’s Vice Premier Ma Kai on Tuesday reported on the social security system at the ongoing bi-monthly session of the National People’s Congress (NPC) Standing Committee, saying the basic idea is a pension system for public employees with the same qualities as those urban retirees from enterprises.

Changes to occupational annuities and the salary system will be made simultaneously nationwide, Ma added.

China has the most public employees in the world. As the population is expected to reach 1.43 billion in 2020, the State Council wants a pension system that covers the whole population.

Ma said the government hopes to cover 900 million people by 2017, and 1 billion in 2020, raising the coverage rate from the current 80 percent to 95 percent.

In the past two decades, China’s public pension systems used different methods of payment, accounting and management, which resulted in widespread disputes.

The monthly pension for retired civil servants and staff in public institutions were 2.1 and 1.8 times the common pension level of 1,900 yuan, according to the the Ministry of Finance’s fiscal science research institute.

Private urban employees pay for their pension before retirement and usually get a pension equal to about half of their final salary, but public workers get much more without making any financial contribution at all.

Zheng Gongcheng of Renmin University of China, said the pension was previously paid from fiscal funds, which is unfair.

“The reform pursues justice in pension systems for different groups of people,” Zheng said. “Despite of a reduction in pensions, occupational annuities for the affected staff will help prevent sharp losses.”

Chen Bulei of the Southwest University of Political Science and Law, said occupational annuity will ease the worries of the 40 million staff affected.