The Chinese Ministry of Finance (MOF) announced Wednesday that it had earmarked 14.92 billion yuan (US$2.06 billion) as special subsidy for the nation's underdeveloped areas to ensure the retirees in companies to get an increased pension from this month on.

The sum of subsidy will be distributed to the country's needy central and western regions, old industrial bases and the Xinjiang Production and Construction Corps., a former military troop, said the MOF on its web site.

After raising retirement pension by an average of 240 yuan per month for three consecutive years ending 2007, the Chinese government promised to continue raising the basic pension for the retired for another three years from 2008.

To ensure that the local governments have enough fund to cover the increased pension for the retired, the MOF has allocated a total special subsidies of 49.92 billion yuan for 2008, said the official.

The MOF said the purpose of adjusting retirement pension is to narrow the pension gap among the the retired from different types of units, such as government units and companies, with the latter getting a lower pension.

To improve the basic old-age pension levels of retired people from companies, the Chinese government has increased the retirement pension five times since 2003, with the annual national average pension up from 7,728 yuan in 2003 to 11,500 yuan in 2007.

(Xinhua News Agency January 17, 2008)