The State Council, China's Cabinet, announced yesterday that the country will build a fair, unified and standardized pension system for its rural and urban population before 2020.

The scheme, with other benefits, will better safeguard seniors' basic living, according to a Cabinet document seeking to unify the current basic pension systems that have led to unequal benefits among urban and rural residents.

The rural seniors in China.?[File photo]

Urban residents have enjoyed better basic pension benefits compared to those in the countryside under the separate systems, but the new rule seeks to change that and make the system fairer, regardless of urban or rural status.

Under the new urban-rural resident pension scheme, residents' annually paid pension insurance, government subsidies and other contributions form the fund pool, which will start paying pensions to residents when they reach 60.

Meanwhile, residents will be required to make insurance payments for 15 years before they receive pensions. They also have 12 annual insurance payment options ranging from 100 yuan (US$16.3) per year to 2,000. The higher the annual insurance payment, the more pension a resident will receive.

The basic pension scheme seeks to provide assistance to the basic livelihoods of unemployed urban and rural residents, and does not cover government staffers or registered urban workers. They receive retirement pensions that carry better benefits.

"The unification of basic urban and rural pensions will particularly benefit China's migrant workers," said Hu Xiaoyi, vice minister of human resources and social security.

A unified pension system ensures that migrant workers from rural regions will still enjoy basic pensions even if they become urban residents, Hu said at a press conference.

Meanwhile, migrant workers will also have the opportunity to receive retirement pensions as registered workers do, after they pay relevant monthly insurance for 15 years, under a new rule announced yesterday by the Ministry of Human Resources and Social Security and the Ministry of Finance.

Their urban-rural basic pensions and retirement pensions will be interchangeable, under the rule from July 1.

Official data showed that China’s migrant workers numbered 269 million at the end of 2013.

Basic rural and urban pensions for residents, together with retirement pensions for registered workers, covered 820 million people at the end of last year, government data showed.