Government and Policy
New pension plan tailored for rural vulnerable
(Xinhua)
Updated: 2010-01-08 21:00
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CHANGCHUN: Social security workers have begun a massive doorknocking campaign to enrol farmers in a pioneering pension scheme in China's Jilin and Fujian provinces.
The government-subsidized pension scheme is aimed at improving the lives of China's estimated 800 million rural people and narrowing the urban-rural wealth gap.
A pilot scheme, which is expected to cover 1.3 million people in Jilin and 300,000 in Fujian, began Thursday. Under a plan by the Ministry of Human Resources and Social Security, the scheme is expected to expand across the country gradually every year.
"Government subsidized contributions to the pension plan can make it attractive and something that makes a real difference to the lives of elderly farmers," said Luo Dechun, head of Jilin's Human Resources and Social Security Department.
In Jilin, a rural resident can choose from five pension levels. The lowest costs 100 yuan (US$14.65) a year. Each higher level costs 100 yuan more a year. Government subsidies from 30 yuan to 50 yuan will be added into the account at each level.
When the holder reaches 60, the monthly pension will be the amount of money in his account divided by 139 plus a government subsidy of 55 yuan and bank interest.
An account with deposits of 100 yuan annually for 15 years will be worth 70 yuan a month on retirement at 60. The holder will receive about 113 yuan a month with deposits 500 yuan a year over the same period.
"We wish to cover as many people as possible by setting the lowest level at 100 yuan, which is affordable for most farmers. For those who are already 60 or above, they can receive the 55 yuan monthly subsidy even if they do not put any money into the account," Luo said.
"Farmers in Jilin had an annual income of 4,500 yuan per capita in 2008. The pension would be enough for them to get by. In contrast, the old pension plan, which had no subsidy, provided way too little," Luo said.
The account requires contributions for at least 15 years or the pensioner will only receive the 55 yuan monthly government subsidy.
For people aged 45 or over when the plan is implemented, the minimum contribution and pension will be reduced accordingly.
"The pensioner can make deposits at any time. He can even pay it all at once," Luo said.
The scheme in Fujian is similar. The only difference is that this scheme has 12 levels, from 100 yuan to 1,200 yuan, offering greater flexibility.
The new schemes also aim to encourage villages, companies, charity funds and other organizations to subsidize pensioners. But specific measures and incentives are yet to be determined as the authorities gain experience from the trial operations, Luo said.
The State Council passed a plan in September last year to implement the new pension plan in 10 percent of Chinese cities, counties and districts as the state assumes greater responsibility for supporting the elderly among?farmers who live 71 years on average and account for more than 60 percent of China's 1.3 billion population.
The establishment of the new pension plan will ensure basic living standards of the elderly in rural China. The policy benefits farmers and helps narrow the gap between urban and rural areas.
It was vital to promoting equality of access to public services among the Chinese people, Premier Wen Jiabao said in August 2009.
