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The Experiment and Progress of Rural Pension Insurance System in China

The Experiment and Progress of Rural Pension Insurance System in China. Zhao Dian Guo Director General of the Rural Social Insurance Department of China. contents. The Evolution of Rural Pension System The Major Elements of the Existing Rural Pension Insurance System

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The Experiment and Progress of Rural Pension Insurance System in China

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  1. The Experiment and Progress of Rural Pension Insurance System in China Zhao Dian Guo Director General of the Rural Social Insurance Department of China

  2. contents • The Evolution of Rural Pension System • The Major Elements of the Existing Rural Pension Insurance System • Problems Existing In the Process of Implementation • Direction of Future Efforts

  3. Primary Exploration Pilot Schemes and Their Expansion Steady Progress Innovation The Evolution of Rural Pension System

  4. The Evolution of Rural Pension System -Primary Exploration • the enthusiasm of people and local government in developed areas to put in place a rural pension system • The 7th Five-year Plan • In 1986, the Ministry of Civil Affairs began explore different approaches to put in place a rural pension system

  5. The Evolution of Rural Pension System - Pilot Schemes and Their Expansion • the central government formulated policies, local government led the implementation efforts • the Ministry selected 20 developed counties to experiment with the rural pension scheme, founded a rural pension insurance office • in May of 1991, launch pilot schemes

  6. The Evolution of Rural Pension System - Steady Progress • In Oct.1995, the General Office of the State Council redistributed Circular on Further Improving Work on Rural Pension Insurance. • the main investment tolls are treasury bonds and bank deposit. No agency is allowed to embezzle or make direct investment with the fund . • the government evolve new policies and gradually put in place an operation mechanism and a regulatory system

  7. The Evolution of Rural Pension System -Innovation • In Nov. of 2002, the 16th NPC set out clearly that places where conditions permit may explore the possibilities to put in place a rural pension insurance system. • establish an integrated urban and rural social security system • how to provide social insurance for farmers whose land has been requisitioned • how to resolve problems for Immigrant Workers

  8. The Evolution of Rural Pension System -Innovation • Currently noticeable achievements • By the end of 2005, 1900 counties in 31 provinces, municipalities and autonomous regions, with 54.4194m farmers insured and accumulated insurance funds of 31.02bn Yuan. About 3.0179m insured farmers received their pension • the fund structure become more rational and its operation • model more standardized , the improvement of the quality of asset

  9. The Major Elements of the Existing Rural Pension Insurance System-New Rural Pension Insurance • The individual pay the lion’s share of the contributions, while the collective pay a supplementary amount. For the government, it offers supportive policies. • Personal reserve account is set, both individual contributions and the sum paid by the collective are recorded under the name of personal account. • governments only bear limited responsibilities, and they won’t have a heavy financial burden.

  10. The Major Elements of the Existing Rural Pension Insurance System-New Rural Pension Insurance • some places produced some specially tailored rural pension insurance programs • some practice in the south of Jiang Su Province (Su Zhou, Wu Xi, Chang Shu,Zhang Jia Gang) • Dong Guan city in Guang Dong Province • Beijing Model

  11. The Major Elements of the Existing Rural Pension Insurance System-Farmers Whose Land Has Been Expropriated • 15 provincial governments have released documents exploring possibilities to put in place a suitable social security scheme for farmers whose land has been requisitioned • the end of 2005, around 4m farmers who lost their land have covered by the system, and over 40 bn Yuan were raised for this purpose • Other provincial governments are studying this issue and will release documents soon

  12. The Major Elements of the Existing Rural Pension Insurance System-Migrant Workers • low contributions, wide coverage, transferable, and integration with existing pension system • Shang Xi, Fu Jian Province, Beijing and some other places, in line with their local conditions, all introduced insurance schemes for migrant workers

  13. Problems Existing In the Process of Implementation • relevant agencies fail to reach consensus on how to put in place proper pension schemes • Absence of an effective management system and implementing institutions • challenge to guarantee the appreciation of the fund

  14. Direction of Future Efforts • governments incorporate the development of rural pension insurance system into their social economic development plan • Pilot Programs shall be gradually expanded • improving the mechanism to subsidize farmers participating the insurance scheme and a transfer payment mechanism

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