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Pension reforms 'need to gather pace'

By Wang Zhuoqiong (China Daily)
Updated: 2009-04-23 07:43

The National People's Congress (NPC) has urged the government to quicken its pace in setting up a nationwide rural pension system, which would provided a better safety net to the country's aging farmers and migrant workers.

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The move is part of ongoing efforts to build a rural social security system to propel rural consumption to cope with the global financial crisis.

The NPC Standing Committee has suggested the transfer of pensions among regions and between the old and new systems be allowed.

Part of the experiment in the new transfer is weaving those who took the old pension with the new system, said Liu Zhenwei, vice-chairman of Agriculture and Rural Affairs Committee of the NPC.

The previous rural pension system - launched in 1992 and mainly funded by individuals and partly subsidized by collective units - was halted and a new system has started with pilot projects in 21 provinces since 2004.

The new pension system includes funding from individuals, collective groups and governments, mainly local ones, research has found.

"It is urgent to have more input from the central government," Liu said.

Governments in central and western provinces often face financial difficulties.

About 60 million of 720 million farmers have participated in the new pension system in rural areas.

Among them, only 10 million have subsidies from local governments, with no subsidies from the central government.

The average rural pension is 80 yuan ($11) a month, only one tenth of an urban employee's pension.

The Ministry of Civil Affairs is expecting more investment from local governments in order to raise the rural minimum allowance, Vice-Minister Jiang Li said.

Recent research in nine provinces shows visible progress in rural social security services, reflected in growing investment and expanding social security coverage, with various pilot projects on rural and urban integration of the system.

"A better social security system has played an important role in releasing rural consumption demand," Liu said.

The committee also suggested the revision of the land management law to lift compensation and improve allocation measures to farmers whose land was acquired.