China has made considerable headway in the establishment of an endowment insurance safeguard system, but problems still exist, said Liu Shanbi, chairman of the Wuhan Municipal People's Political Consultative Conference in central China’s Hubei Province.
The first problem is shortage of funds. Many state-owned enterprises have been in the red for years, and unable to pay pensions for their retired employees on time. Meanwhile, many employees are lowly paid and lack necessary assurance.
Delays in payment are frequent in some state-owned enterprises. For those working for private, cooperative and foreign-funded enterprises, it is hard to organize endowment insurance in a timely way due to the high mobility of employees.
Another problem relates to a poor legal and regulatory environment. Leaders in some areas still see requiring enterprises of buying endowment insurance for their employees as a means to collect extra charges, which, they consider, might discourage creation of a good investment environment.
Currently, China is facing challenges from the ongoing program of economic strategic adjustment, imminent membership of the World Trade Organization (WTO), and an ageing society. To further improve the endowment insurance payment system is extremely urgent and Liu made the following suggestions to deal with the aforesaid problems:
-- Making relevant laws to standardize the rights and responsibilities of the government, enterprises and citizens and create a suitable legal environment for operation of endowment insurance payments.
-- Establishing a unified and standardized social guarantee system to ease the uneven development of endowment insurance in various areas.
-- Carrying out the tax-for-fees reform of social insurance and establishing a reliable and steady social guarantee fund collection channel.
-- Adjusting the local financial expenditure structure and raising the proportion of social guarantee expenditure in the financial budget.
-- Issuing lottery tickets on behalf of social insurance funds and treasury bonds as a means of social guarantee, with the funds being restricted to special use only.