Government and Policy

New old-age pension ensures dignified senior life

Updated: 2011-01-01 22:36
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BEIJING - A new old-age pension for China's rural senior citizens is giving them economic independence.

Long Chengde, 69, from Quzhou County in North China's Hebei province smiles as he holds a gray deposit book. In 2010, Long and his wife received 1,320 yuan (about $200), or 55 yuan a month per person, under the "New Old-Age Insurance System for Rural Residents" program.

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Long thought only retired urbanites could enjoy an old age pension.

"It makes me feel like I have another eight sons," said Long, whose four sons give their parents 600 yuan per year and food.

Wang Jinshan, 78 and from a neighboring village, beamed,"With the pension, I do not have to ask my son for money."

According to the Ministry of Civil Affairs (MCA), China had 167 million senior citizens at the end of 2009, accounting for one eighth of the China's population.

Old Chinese people are expected to number 248 million in 2020. About one of every three Chinese will be an old person in 2050. Rural residents accounted for 57 percent of the Chinese population in 2007, according to the latest official figures.

The present population structure is a heavy burden for the young Chinese people to support the old.

In the early 1990s, 10 young Chinese supported one elderly person. These days, every young couple has to support four seniors and one child.

In the past, some local Chinese governments tried to set up endowment insurance systems whereby the rural people paid into a fund to support themselves.

In 2009, China officially experimented with the old-age pension for rural seniors in one tenth of its counties. China had 2,862 county-level administrative regions in 2005.

In November 2009, South China's Hainan Province became one of the first to pilot the program.

Under the system, about 98 percent of rural residents aged 60 years or older - some 530,000 people - received 165 yuan for the fourth quarter of 2010 Thursday, according to Chen Cheng, vice governor of the province.

The pensions are paid with funds from three sources. Rural residents aged 16 to 59 years pay 4 to 8 percent of the base payment, which is the average full-year per capita income of the previous year in the locality.

They are allowed to pay more so they can receive a larger pension in the future as long as the payment does not exceed 15 percent of the base payment. The cumulative payment term for rural persons younger than 45 years is 15 years. In 2008, per capital net income of Chinese rural residents totaled 4,761 yuan.

The central government has earmarked funds for paying the 55-yuan-per-month pension. Central government coffers will pay 80 percent of the basic pension in China's poor western areas and 60 percent in central areas. It will pay 20 percent in the wealthier eastern areas. Local governments will pay the rest.

Some 79 percent of Hainan's rural residents aged 16 to 59 - 1.78 million people - had participated in the program by December 27, 2010.

"Carrying out the mechanism is a major move for our province. It will speed up the construction of a social security system that covers all senior citizens, both urban and rural," said Wei Liucheng, secretary of the Hainan Provincial Committee of the Communist Party of China (CPC).

After seeing its effectiveness and popularity, the Chinese government in 2010 expanded the experiment to 23 percent of the nation's counties, said Yin Weimin, the Chinese civil affairs minister.

Yin said over 35 million old people in rural areas have received the pension under the new program. By the end of 2010, about 100 million rural residents will have joined the program.

In Quzhou County, more than 90 percent of rural residents participate in the program, said Bai Gang, the county government chief.

"In our county, seniors in rural areas have no problem getting enough to eat and wear because of the support of their children. They rely on their sons for money. Now, with the 55-yuan-per-month pension, they will not have to depend on their sons. This has greatly elevated their dignity," said Bai.

"The mechanism has warmed the hearts of rural old people, " said Chinese Civil Affairs Minister Yin.

Other provinces are following suit. Southwest China's Guizhou Province has 5 million impoverished rural residents, the most of any Chinese province. The program covers one third of its counties. East China's Shandong Province expects to meet the coverage target in 2013. West China's Ningxia Hui and Tibet autonomous regions, as well as Qinghai Province will accomplish the task ahead of the scheduled 2020.

"Though the monthly-pension is meager, the mechanism marks a new era in efforts to support old people in rural areas," said Premier Wen Jiabao.

Seeing the benefits of the program, more young rural people have shown interest in the program.

Bao Dongxiu, 30, a migrant worker from Lunan County, Shandong Province, said, "I will buy some commercial insurance policies first because my hometown is not yet covered by the program. I hope to stay in the city when I become old. My child will grow up and have his own life. I have to think about my retirement pension now."

Officials say the new old-age pension program, along with the rural medical insurance system and children's tuition-free education, has improved rural Chinese people's life.

Wu Min, 60, from Baoji in west China's Shaanxi Province, is satisfied with the new old-age pension system. He bought some books for his grandson as soon as he received his first payment last year, and at dinner times, his family can now afford to eat meat sometimes.

Civil Affairs Minister Yin Weimin said, "This new social old-age pension insurance mechanism has greatly harmonized relations in rural families and improved the lives of old people in rural areas."