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Pension rules proposed to help those near retirement
By Wang Zhuoqiong (China Daily)
Updated: 2009-12-23 07:53
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The Law Committee of the National People's Congress (NPC) has proposed modifying the current pension system so that retirees who have not fulfilled contribution requirements will still be eligible for a pension if they continue to contribute after retirement.
The suggestion was stipulated in the latest draft of a social security law, which was submitted to the NPC Standing Committee for third reading yesterday. The draft says pensioners who have contributed for less than 15 years when they retire will be eligible for a monthly stipend if they continue to complete the 15-year payment period. They can also choose to get a one-time benefit payout upon retiring if they are not willing to continue monthly payments, NPC Law Committee vice-chairman Zhang Bailin said.
Under the current practice, retirees who have not paid for an accumulated 15 years will only get a one-time payment from their own pension account. They will not be able to receive a monthly stipend.
Chinese pensions consist of community funds and an individual account.
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China's pension scheme was put in place in 2000 after years of reform, he said. As a result, people who were 45 years old at that time found it meaningless to pay into the pension because they had less than 15 working years remaining.
"These people - between 5 million and 10 million - will be encouraged to pay for pensions and get monthly income even after they retire," Liu said.
