Vice Minister of the Ministry of Labor and Social Security Liu Yougfu recently gave further details of the major developments in the pipeline for social security provision for retired state employees. The improvements will be introduced in three tranches:
By the end of this year, 50 percent of retirees in major cities and better-off rural areas will be included.
By the end of 2003, this will have been extended to 80 percent.
By the end of 2004, all eligible retirees will be in the new social security scheme.
The effect of these new social security measures will be that local government will take over responsibility from the work units for providing pensions and other benefits like support with accommodation and medical services.
What remains to be done to ensure a smooth transition coupled with the success of the new provision?
Regulation will be necessary to ensure pensions are paid timeously and in the correct amounts. The ministry will establish a database of personal files to help in the smooth running of the new arrangements. It will also guide the retirees in making the break from the service currently provided by their old work units and joining the new social security scheme.
A planned approach to implementation will be necessary with monitoring and control in place at the local level to ensure that the process rolls out according to program.
It will be necessary to ascertain the liabilities of the retirees’ original units. The units will remain responsible for any retirement pay in excess of the government’s unified grant. They will also continue to shoulder housing costs like management and maintenance in respect of former employees retiring before the advent of Housing System Reform. In addition they will still have to meet the medical expenses of their pensioners where they have no other form of medical insurance.
Just over 11 million eligible retirees had been brought into the new social security scheme by this September. This is about 35 percent of the total and represents an increase of nearly 13 percent since the end of last year.
(china.org.cn by Feng Yikun November 19, 2002)