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.
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.
Consisting of pension, unemployment, health, and occupational
injury insurance, the annual income of the social security fund
increased 20 percent year-on-year to 696 billion yuan (US$87
billion) in 2005.
"Any way of managing those funds to add to their value should be
cautious and based on the premise that they secure," said Tian
Chengping, minister of labour and social security.
In another move to protect the funds, the ministry has called on
all provinces, municipalities and autonomous regions to establish
social security fund supervision commissions.
In addition to beefed-up supervision of social security funds,
China also plans to extend its social assistance system to cover
all urban and rural residents by 2010.
The new system will mainly consist of financial subsidies to the
nation's poorest families and childless elderly people in rural
areas, as well as temporary assistance to areas hit by disasters or
outbreaks of disease, Vice-Premier Hui Liangyu told the 12th National Civil
Affairs Conference on Thursday in Beijing.
Investment in social assistance funds from both central and
local treasuries reached 30 billion yuan (US$3.75 billion) in 2005,
covering about 100 million needy people, according to statistics
from Ministry of Civil Affairs.
(China Daily November 25, 2006)