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Pension fund to draw in more workers

By Tan Yingzi (China Daily)
Updated: 2009-02-07 08:53

Millions of rural and urban migrant workers will be better protected under new pension fund regulations, the government has said.

The Ministry of Human Resources and Social Security released two documents for public feedback on Thursday, covering rural migrant workers in the pension system and fund transfer between provinces for urban migrant workers.

One proposal is to lower pension contributions from rural migrant workers and their employers, from 8 percent and 20 percent of the employee's income to 4 percent and 12 percent.

If rural migrant workers contribute regularly for 15 years or above, they receive a monthly pension after retirement, the ministry said.

"Rural migrant workers will enjoy the same rights as their urban counterparts if they pay their contributions in time," the ministry said.

Related readings:  China may launch new social pension system for farmers  Pension for farmers  Pension account transfer proposed  Pension for the aged

The other proposal will eliminate barriers on transferring the pension fund between provinces to help the workforce move more freely in the country.

"The two policies are very important in the development of the pension insurance system and useful amendments to the current social security system," Zheng Gongcheng, the country's leading social security scholar and senior lawmaker, told China Daily yesterday.

"The difficulties in transferring the pension fund have severely damaged the interests of migrant workers," he said.

To incorporate more views, the public is encouraged to offer its opinion on the two draft documents before Feb 20.

According to the ministry's report, there are about 230 million farmers-turned-workers in China, of whom 130 million work in cities far away from their hometowns. In addition, thanks to the fast growing economy, the urban workforce flow among provinces has been increasing in recent years.

But migrant workers face many difficulties paying to, and transferring, the pension fund because of the high contributions and inability to transfer the fund between regions.

At the end of 2008, only 17 percent of rural migrant workers were eligible for a pension in cities.

"The central government is now working on the overall structure of the pension fund at the provincial level," the ministry said.

It said the government would also establish a national social security information system and every citizen will have their identity card numbers as the social security number to check on pension fund information. The project will first reach out to rural migrant workers.

The economic slowdown has squeezed 20 million migrant workers out of jobs, Chen Xiwen, director of rural work leading group, a central government advisory body, said last week.

They accounted for 15.3 percent of China's 130 million migrant workers, he said.

Thousands of small factories downed shutters as the financial crisis took a heavy toll on the nation's exports since September.