China is now stepping up efforts to improve its old-age insurance system and reform the fund-raising mode, so as to cope with the aging problems which will reach the peak in the 2030s, according to a white paper issued by the Information Office of the State Council Tuesday.
The white paper, titled China's Social Security and Its Policy, said that China has expanded the coverage of its basic old-age insurance after establishing a unified system for enterprise employees in urban areas across the country with a social-pool-plus-personal-accounts scheme in 1997.
Initially, China's basic old-age insurance covered only employees at state-owned and collectively-owned enterprises in urban areas. In 1999, this coverage was expanded to foreign-invested, private and other types of enterprises in urban areas. In 2002, it was further broadened to include all those who were employed in a flexible manner in urban areas.
According to the statistics, last year, the number of people participating in the basic old-age insurance scheme in China reached 155.06 million, 116.46 million of whom were employees.
Meanwhile, employees and retirees at government agencies and public institutions, which have a different retirement and pension system from enterprises, also join in pilot projects trying to raise the retirement pension funds through the social pool program.
By the end of 2003, some 11.99 million employees and 2.58 million retirees of government agencies and public institutions had participated in such pilot projects.
According to the white paper, the pressure on the payment of funds for basic old-age insurance is becoming ever greater, as the aging of the population quickens and the number of retirees increases steadily.
"The Chinese government is raising such funds through multiple channels," said the white paper, listing the practice of joint premium payment by both enterprises and employees as one channel.
Statistics show that the basic old-age insurance premium paid by enterprises nationwide totaled 259.5 billion yuan (31.3 billion US dollars) last year.
China has also increased the subsidy outlay from the government financial budget for basic old-age insurance funds. In 2003, state budgets at all levels contributed 54.4 billion yuan (6.6 billion US dollars) to basic old-age insurance funds, of which 47.4 billion yuan (5.7 billion US dollars) came from the central budget.
Meanwhile, the Chinese government also decided in 2000 to set up a national social security fund, which can serve as an important financial reserve for the old-age insurance and other social security programs. By the end of 2003, it had accumulated over 130 billion yuan (15.7 billion US dollars).
According to the white paper, the Chinese government has encouraged enterprises with suitable conditions to set up annuities for their employees, in addition to participating in the compulsory basic old-age insurance. In 2003, nearly 7 million people participated in the enterprise annuity program.