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| Individuals and Enterprises to Pay More for Pension |
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Salaried workers in Shenzhen and their employers will be required to pay 3 percent and 2 percent more of the employee's salary into the pension fund, as part of a new pension scheme which is expected to come into effect from July, according to the city's labor and social security bureau. The new regulation is based on a decision made by the State Council last year on the employees' basic pension scheme. The bylaw is expected to become effective from next month, after the Shenzhen Municipal People's Congress approves it. Currently, the pension scheme has two parts -- a basic social account indexed to the average salary level and an individual account that will be returned to individual employees. Together, they will ensure retirees receive a monthly amount of money which is 58.5 percent of their average income during their careers. According to the new scheme, the contribution rate for an individual account is to be cut from 11 percent of employees' monthly salary to 8 percent, all to be paid by employees themselves. As a result, the employees' contribution to pension will be raised from the previous 5 percent of the monthly salary to 8 percent. The employer's contribution to pension will no longer be included in personal accounts. Employers are to contribute 10 percent of their employees' salaries to the pension, 2 percentages more than the current proportion. Employers' contribution, together with government allocation, will constitute the basic social accounts. Experts have commented that reducing the individual pension account is a much-needed step toward fixing China's plagued pension system. (Shenzhen Daily June 23, 2006) |
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