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Farmers become migrant workers to boost pensions

By Chen Xin  (China Daily)

13:25, March 22, 2013

Li Huabing left his village in Chongqing for Guangdong province after Spring Festival because he has decided to work for two more years to save money for his old age.

Li, a 63-year-old farmer from Yongle village in Kaixian county, Chongqing, was among the first group of farmers who went to coastal regions to earn a living in the 1980s.

Today, Li can earn 3,000 yuan ($480) a month at a factory in Guangdong. He leaves his wife at home to work a 4,600-square-meter farm.

The farm can bring in 10,000 yuan profit annually, he said.

As another source of income, both Li and his wife can receive a pension of 80 yuan monthly.

"The pension and the money from the farmland will not be enough to support us in our old age," he said.

Li said his children also work at factories in coastal regions, and their earnings can cover only their own family expenses.

"I have saved some money by working outside, but I want to collect more to offset the low pension, and I don't want to pass the burden on to my children," he said.

About 30 other farmers in their 60s or older in the village are also working in other places, Yongle village head Yin Qingsheng said.

Of the approximately 1,300 villagers who leave home to earn money in cities, more than 200 are older than 50, said Yin.

"Many of them face the problem of not having enough money to live a moderately well-off life in old age," he said.

Mountainous Kaixian is home to 1.65 million, and nearly a third of the population migrated to earn money last year, according to Yuan Wanxiang, a local official overseeing labor flow.

About 15 percent of those migrants are older than 50, he said.

Only 16 percent of migrants have joined the endowment insurance program for urban workers, said Yuan.

China has three types of social endowment insurance: basic endowment insurance, for the urban working group; new rural social endowment insurance, for rural residents; and social endowment insurance, for non-working urban residents.

Under the Social Security Law, which took effect in 2011, farmers-turned-workers must participate in the basic endowment insurance for the urban working group.

Yuan said one reason that migrants don't have endowment insurance for workers is many of them work at construction sites. Those jobs pay by day and there is no employment contract between workers and employers.

"Many migrant workers don't contribute to the endowment insurance because they want to have more money on hand," he said.

Workers must pay 8 percent of their wages, and employers pay a sum equal to 20 percent of workers' wages each month to form workers' pension accounts.

Workers have to pay into the accounts for at least 15 years to be able to collect a pension after retirement.

Some labor-intensive enterprises, which absorb a large number of migrant workers, are also reluctant to encourage workers to contribute to endowment insurance because they worry about cost increases, Yuan added.

But 90 percent of the county's former farmers who are now workers have joined the new rural social endowment insurance for rural residents, Yuan said.

The rural endowment insurance guarantees that rural residents in Kaixian can receive monthly pensions of 80 to 170 yuan when they reach age 60 after they have contributed 100 to 500 yuan a year for 15 years, he said.

The more money they contribute, the bigger the pension.

"But that amount can hardly cover the cost of living, so many farmers continue to work outside when they turn 55 or even 60," said Yuan.

Liu Xing, a social security official in Renshou county, Sichuan province, said migrants usually have contributed to endowment insurance for urban working groups for around eight years by the time they turn 50.

Sometimes the contribution pauses when they change jobs.

Last year, 203 migrants who had contributed to the insurance quit because they reached the retirement age but had not yet contributed for 15 years, Liu said.

Workers who quit the insurance can get back the sum they paid into the pension accounts. But they cannot get what their employers have paid for them.

Lu Quan, a social security expert with Renmin University of China, said migrants who have not participated in an endowment insurance program for working groups have to rely on their families in their old age.

Another way is that local governments can raise the pension for rural endowment insurance collectors, he suggested.

To prevent young migrant workers from facing the same old-age pension problems their parents have, measures should be taken to ensure that endowment insurance for working groups covers all migrants, Lu said.

"Labor-law enforcement authorities should strengthen efforts to make employers sign employment contracts with workers and make employers' responsible for paying workers' endowment insurance bills a clause in the contracts," he said.

Eighteen percent of the 250 million migrant workers in China had joined the endowment insurance for urban working group by the end of last year, according to the Ministry of Human Resources and Social Security.

In general, the pension produced by endowment insurance for workers is much higher than the sum produced by endowment insurance for rural residents.

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