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More State Retirees Draw on Socialized Pension Funds
A total of 18.6 million retired workers received their pensions from a socialized pension system by June, according to the latest report released by the Ministry of Labour and Social Security.
The socialized pension system, established in 1997, have covered 64 per cent of the country's pensioners, 15.8 per cent more than it covered last year, the report said.
The new system makes pension funds independent of current enterprises and puts them under the supervision of local labour and social security bureaux.
The State plans to include 80 per cent of retirees under the pension system by December.
The coverage rate in coastal areas in East China and large cities is expected to reach 100 per cent by September.
The current system establishes individual pension accounts for employees in State enterprises. Retirees can receive their pensions under the social security system. In the past State enterprises paid pensions for retired employees, though some are losing money and can barely afford their payments.
The change will help relieve State-owned firms of the huge financial burden of caring for former employees.
Shanghai and Shaanxi Province are currently pioneering the work of popularizing the socialized pension system to retirees. The coverage rate in Shandong and Fujian provinces is more than 90 per cent. The rate in Chongqing Municipality, Zhejiang and Yunnan provinces has also reached 80 per cent.
But the popularization of a socialized pension system is not balanced around the country, said the report. The popularization rate in Beijing, Guizhou and Hunan provinces are only around 30 per cent.
There will be another 2 million people retiring this year which raises the number of pensioners in the country to more than 31 million. The yearly pension payout is estimated to be more than 200 billion yuan (US$24.2 billion).
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