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Nation to draft laws on social security fund management

(China Daily)
Updated: 2006-11-25 08:57

China will issue two laws to regulate the management of its social security funds in the wake of a number of scandals in the sector, according to officials from the Ministry of Labour and Social Security.

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Along with the Social Security Law, which is currently being drafted, the Social Security Fund Management Regulation will also be put on the legislative agenda, according to the officials.

Although the two laws are expected to be released concurrently, their exact date of issue has yet to be set.

Ministry officials said that the absence of such legislation was the major reason for the misappropriation of social security funds.

Chen Lian, director of the ministry's supervision bureau, said that only the Labour Law currently regulates social security funds to any extent.

"Some other relevant regulations only remain at ministry level, and are not strong enough to regulate all aspects of the management of the funds," said Chen.

A National Audit Office report published on Thursday highlighted major problems in the running of social security funds, such as lax supervision, poor management and embezzlement.

According to the report, around 7.1 billion yuan (US$900 million) of the country's 2 trillion yuan social security funds had been misappropriated.

The country's top auditing body said that misappropriated funds would be traced and recovered, and called for the management of the funds to be more transparent.