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Problems Exist in Pension System, Says Official

With the aging of the population, diversified forms of employment and development of urbanization, China's ongoing basic old-age insurance system doesn't go in line with the social and economic development, said a Chinese official in Beijing Thursday at a press conference by the State Council Information Office.

 

The system has not covered a large number of individual businessmen and persons in the form of flexible employment, said Li Yongfu, vice minister of Ministry of Labor and Social Security.

 

Another problem is, he said, the method of benefit calculation and payment is not so reasonable and there is lack of incentive and restriction mechanism for participation and paying contribution.

 

The adjustment mechanism for basic old-age benefit is not perfect and the overall pension level is quite low, said Liu, noting that a relatively low level of social pooling has resulted in a weak risk sharing across the pooling areas.

 

And, given the fact that the development of the country's occupational pension lags behind, the multi-tier old-age insurance system is not yet in place.

 

"All of these affect the sound operation and sustainable development of the system, which needs further reform and improvement," he said.

 

(Xinhua News Agency December 15, 2005)

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