China makes five breakthroughs in managing old-age pensions

China has achieved in recent years five breakthroughs in its old-age pension scheme, labor and social security officials said lately.

The first is setting up a basic, unified system. Now all kinds of enterprises across the country pay a sum equivalent to 20 percent of an employee's total payment as old-age pension, and individuals pay 8 percent of their payment. All the money paid by individuals and 3 percent paid by enterprises go into personal accounts of employees. After reaching legal retirement age, employees will be given a basic pension equivalent to 20 percent of average local payment standard.

The second is expanding the scheme coverage. By the end of last year, altogether 150 million people nationwide had been covered by the endowment insurance program, an increase of over 40 million people compared with five years ago.

The third is ensuring that pensions of the retirees are paid on time and in full.

The fourth is forming a new pattern featuring diversified financing channels. From 1998 to 2003, the national old-age fund increased at an annual average rate nearing 20 percent, including 80 billion yuan paid by individuals and 220 billion yuan by enterprises; during the six years the central authority put in 176 billion yuan to fill the gap. A mechanism in which the state, enterprises and employees share the pension fund is taking shape.

The fifth is progress in socialized administration. By the end of last year, the pension of 29 million retirees, or 84.5 percent of national total, has become society-managed.

By People's Daily Online