Editorials
Finest gift for the aged
(China Daily)
Updated: 2009-12-25 07:48
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The State Council's decision to raise pension for enterprise retirees nationwide by 10 percent from 2010 is much delayed as the aging of one of the world's biggest population has made it more urgent than ever before for China to improve its social security net, especially the substantially under-funded pension schemes.
It is the fifth consecutive year that China has raised the basic pension payments for enterprises retirees since 2005.
Yet, when compared with such efforts to gradually increase pension payment, the central government's new rule to enable migrant and urban workers to transfer their pension accounts when they find new jobs in other provinces may be more important.
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By making it more convenient to transfer and renew pension funds accounts anywhere across the country, the new rule will likely attract more participants and boost the development of social insurance.
The current pension insurance discourages cross-regional flow of workers. It stipulated that a person's contribution to the pension fund that increases with the number of working years would be stopped and reverted to the starting level when a worker leaves a job to work in another province or region.
But the need for cross-regional flow of workers and retirees is going to rise in China given that more and more farmers have been joining the army of migrant workers. Usually, migrant workers change jobs more frequently than urban workers. It is simply unfair to expose migrant workers to pension losses from cross-regional transfer.
A flexible labor market is definitely essential to the robust growth of the Chinese economy. By allowing continuous flow of laborers out of the agricultural sector into the relatively more productive industrial sector, it can help boost the productivity of the Chinese economy.
Besides, the rapid aging of the population is also a huge concern that Chinese policymakers must address now. Latest statistics show that Chinese aged 60 and above have already reached about 160 million by the end of last year, accounting for 12 percent of the total population. And the country is expected to witness the first surge of aging population this year since it has become an aging society.
If the current social security coverage remains too meager to meet the public's needs, most people will rather save more money in banks than careless spending.
Hence, more efforts to replenish pension schemes are integral to the country's pursuit of a consumer-led growth.
(China Daily 12/25/2009 page8)
