China tweaks its pension insurance system China tweaks its pension insurance system

China tweaks its pension insurance system
12 Apr 2018

Changes are planned for China's urban and rural residents’ pension insurance system, which covers more than 500 million people.

Under new guidelines, a defined benefit mechanism; a normal adjustment mechanism on basic pension; an adjustment mechanism on individual payment standards and a dynamic adjustment mechanism on subsidies will be set up. The urban and rural residents’ pension insurance fund will also manage entrustment loans

According to ENCS, the pension insurance system covers urban and rural residents aged 16 or over who are neither enrolled students nor employed by state bodies or public institutions. They are also not covered by the workers’ endowment insurance system.

As of the end of December 2017, 513 million people were covered by the urban and rural residents’ pension insurance system, 155.98 million of whom received a monthly pension of 125 yuan (US$20) per person.

Under the guideline, central government will determine the minimum national basic pension based on per capita disposable income and the financial status of local urban and rural areas. Local governments will increase basic pensions in line with local conditions, although preference will be given to urban and rural residents who are over the age of 65.

All regions are also expected to determine and adjust the basic pension insurance payment grade standard and subsidy level based on residents' income growth and how developed their area is economically. Residents also have the option of paying a higher grade fee in pension insurance terms.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

Changes are planned for China's urban and rural residents’ pension insurance system, which covers more than 500 million people.

Under new guidelines, a defined benefit mechanism; a normal adjustment mechanism on basic pension; an adjustment mechanism on individual payment standards and a dynamic adjustment mechanism on subsidies will be set up. The urban and rural residents’ pension insurance fund will also manage entrustment loans

According to ENCS, the pension insurance system covers urban and rural residents aged 16 or over who are neither enrolled students nor employed by state bodies or public institutions. They are also not covered by the workers’ endowment insurance system.

As of the end of December 2017, 513 million people were covered by the urban and rural residents’ pension insurance system, 155.98 million of whom received a monthly pension of 125 yuan (US$20) per person.

Under the guideline, central government will determine the minimum national basic pension based on per capita disposable income and the financial status of local urban and rural areas. Local governments will increase basic pensions in line with local conditions, although preference will be given to urban and rural residents who are over the age of 65.

All regions are also expected to determine and adjust the basic pension insurance payment grade standard and subsidy level based on residents' income growth and how developed their area is economically. Residents also have the option of paying a higher grade fee in pension insurance terms.

Emma

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

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