Government and Policy

Pensions reach out to aging villagers

Updated: 2010-12-31 07:03
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BEIJING - Still tilling their plot of land in North China's Hebei province, 78-year-old Wang Jinshan and his 72-year-old wife, who are not even familiar with the concept of social security, receive 110 yuan ($16.7) in pension payments each month.

The old couple is part of the 100 million rural residents in China who have joined the government-subsidized rural pension scheme by the end of 2010, said Yin Weimin, minister of the Ministry of Human Resources and Social Security (MOHRSS), Thursday.

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China launched a pilot pension program for its 800 million-strong rural population in August last year as part of efforts to narrow the standard-of-living gap between rural and urban residents.

Under the system, a total of 35 million farmers over 60 are currently provided with a basic monthly payment of 55 yuan ($8.3) in addition to the pension payments from their personal contributions, said Yin.

Any rural resident over the age of 16 who does not take part in the government's existing urban pension scheme is eligible to join the program.

They can choose to pay 100 yuan, 200 yuan, 300 yuan, 400 yuan or 500 yuan per year into the pension program before reaching 60 when they start to receive pension payments of at least 69 yuan each month.

For those who were already over 60 when the pension system was launched, like Wang and his wife, each of them can still get 55 yuan each month from the pension system.

"As a farmer, I never thought I could ever get a pension. Although it is not that much, I feel happy and that's enough," said Wang and his wife, who care for their grandson while his parents work away from home.

The old couple currently gets 15 yuan per month from their son as pocket money, in addition to food.

"With the 110 yuan, we can pay for electricity, water and coal ourselves. My son is not that easy-going, so I am happy that I don't need to depend on him," said Wang.

In the past only urban dwellers were covered by the national pension system and old folk in the countryside had to depend on their children to take care of them.

The new government-supported rural pension system is also designed to ease the family's burden of having to take care of their elders, said Zhou Tianyong, a professor with the Party School of the Communist Party of China Central Committee.

Wang lives in Quzhou county, Handan city of Hebei. With a total rural population of 445,000, the county has 310,000 people over 16, among which 260,000, or about 90 percent, have taken part in the new rural pension system, said Bai Gang, head of the county government.

Like Quzhou, more than 1,100 counties in China are now covered by the national or local pilot rural pension programs, according to MOHRSS.

"More and more young farmers are migrating to the cities to earn higher wages and the one-child policy adopted in the early 1980s has left fewer children compared with the aging population," said Zhou.

Experts have hailed the program as it would also greatly help raise the living standard of rural people.

"To many urban people, the rural pension payments might sound negligible, but they mean a lot to the farmers, especially those elderly who can hardly farm themselves," said Zhou, expecting the payments to increase in the following years.

The Chinese government already operates a basic pension plan for urban workers. Last week it raised the retired enterprise-employees pension 10 percent from 2010 levels, or about 140 yuan per person per month.

Zhou also expected the rural pension program, which had been almost non-existent before 2009, to help boost rural consumption as farmers would normally save for old age and ill health.

Chinese authorities have been working to improve both pensions and medical insurances, in a bid to encourage farmers and poorer urban workers to spend a larger proportion of their income.

"Once the farmers are protected by a stronger social safety net, they would be more inclined to spend without having to worry about the future," said Zhou.