The State Council on Friday approved a plan to launch the country's first publicly run employee contribution pension schemes in five provinces and municipalities.

The pilot program, targeted at workers in state institutions, is to be launched in Shanxi, Shanghai, Zhejiang, Guangdong and Chongqing.

The plan was approved at an executive meeting of the State Council chaired by Premier Wen Jiabao.

The plan covers items such as employee payment proportion, pension fund management at provincial level and building a socialized pension service system.

Under the schemes, the amount of each pension is linked to the amount paid in contributions.

The executive meeting agreed that provincial-level governments should be responsible for the proper administration of the schemes.

China's basic pension system was established in 1997. However, its coverage lags behind growing number of retirees, diversified modes of employment and increasing urbanization.

(Xinhua News Agency March 1, 2008)