Business / Policy Watch

China seeks unified pension scheme before 2020

(Xinhua) Updated: 2014-02-27 08:49

BEIJING - The State Council, China's Cabinet, announced on Wednesday the country will build a fair, unified and standardized pension system for its rural and urban population before 2020.

The scheme, together with other social assistance and benefits, will better safeguard seniors' basic lives, according to a cabinet document that seeks to unify the current basic pension systems that have led to unequal benefits among urban and rural residents.

Urban residents have enjoyed better basic pension benefits compared to  those in the countryside under the separate pension systems, but the new rule seeks to change that and make the system fairer, regardless of people's urban or rural identities.

Under the new urban-rural resident pension scheme, residents' annually paid pension insurance, government subsidies and other contributions together form the fund pool, which will start paying pensions to residents after they reach the age of 60.

Meanwhile, residents will be required to make insurance payments for 15 years before they receive monthly pensions. They also have 12 annual insurance payment options ranging from 100 yuan per year to 2,000. The higher the annual insurance payment, the more monthly pension a resident will receive.

The basic pension scheme seeks to provide assistance to the basic livelihood of unemployed urban and rural residents, and does not cover government staffers or registered urban workers, who receive retirement pensions that carry better benefits.

"The unification of basic urban and rural pensions will particularly benefit China's migrant workers and their families," said Hu Xiaoyi, vice minister of human resources and social security.

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