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Doubts raised about pension system

By Yang Yao  (China Daily)

10:30, February 23, 2013

A caretaker washes the feet of an elderly woman in Beijing’s Tongzhou district. Lawmakers have called for increased coverage of China's pension system. [Photo/Xinhua]

Many Chinese people say they are concerned about the inadequate and unbalanced pension distribution in the country, according to a survey revealed by a government think tank on Friday.

Nearly 39.1 percent of the 2,000 people surveyed complained that pensions are too little to meet their living needs, according to a report released on Friday by the Chinese Academy of Social Sciences.

Only 17 percent of the respondents said they can live off their pensions, the survey showed.

Elderly people in rural areas strongly complained about the rural endowment insurance system; 78.9 percent of insurance buyers in the survey said the pension could not meet their living needs, while 56 percent of their urban counterparts said the same thing.

However, only 3.8 percent of government staff have that complaint.

"Different feelings from endowment insurance participants reflect the differentiated pension welfare system," the report concluded.

But 76.4 percent of those surveyed said that overall, they are satisfied with the country's endowment insurance systems.

In China, the pension follows a dual system, said Gui Shixun, a professor at East China Normal University.

The pensions for those who worked within the system — for the government and public institutions — and out of the system, including those working for companies and who live in rural areas, are very different.

Reform of the dual system has been under discussion for a while, but no schedule for implementation has been published, said Tang Jun, a researcher with the Chinese Academy of Social Sciences.

The only information that authorities have disclosed about reform is from December, when Hu Xiaoyi, vice-minister of human resources and social security, told Xinhua News Agency that the ministry was planning to merge social insurances. He did not offer details or a schedule for the plan.

Pilot programs on reforming the dual system have been conducted in some cities for a few years, but observers said almost no change has been seen due to the complicated situation.

For example, Feng Anying, who is in her 80s and who retired as an accountant of a manufacturer in a town in Jiangsu province, has a pension of about 1,600 yuan ($256) a month.

She said the little amount of money could hardly meet the daily expenses. But because her husband Ji Rong, once a soldier and who retired as a civil servant, has a monthly income of 7,000 yuan, she said she felt "lucky".

When asked if she would like the pension system changed, she said: "Would that lead to the reduction of my husband's pension? If that is the case, I would not want that to happen."

Tang, the researcher, said that the dissatisfaction and inequality is getting worse since the Chinese population is aging so quickly, which has made reform of the pension policy such an urgent issue.

However, transferring the dual system to a uniform one would not be the wisest plan, Tang said.

Tang proposed a plan that combines basic pensions plus supplementary ones.

"The amount of the basic pension that insures basic living standards would be the same for every citizen," Tang said.

"The supplementary ones could vary according to their payments before retirement."

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