Opinion

Loopholes even in new pension system

(China Daily)
Updated: 2010-01-08 07:57

The government issued a regulation on pension recently, allowing migrant workers to transfer their old age insurance accounts when they change jobs. But contrary to what experts had thought, many migrant workers rushed to withdraw the money in their pension accounts. This shows the new regulation needs improvement, says an article in Oriental Morning Post. Excerpts:

The scenes in social insurance service offices must have shocked many experts.

As soon as a new regulation on pension allowing migrant workers to transfer their accounts across provinces came into effect, many migrant workers made a beeline for insurance offices to withdraw the amounts.

A survey shows migrant workers rushed to withdraw the amounts either because they misunderstood the new regulation or because of the uncertainties of the job market. That may be true, but there are other reasons, too.

A good social policy should be clear and unambiguous. But the new regulation leaves several unanswered questions.

First, it says only 60 percent of the total amount can be transferred, without clarifying what would happen to the rest. That could have made the migrant workers wonder whether they would get the full pension after retiring.

Second, there are ambiguities in the requirements and procedures for insured workers to claim their pension. That, too, could have prompted them to withdraw the amounts.

Another reason why the migrant workers are alarmed could be the regulation's declaration that an insured worker can only withdraw the amount after reaching the pension age.

This might have prompted them to withdraw their insurance cover before it was too late.