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Don't play favorites in pension reform
By Miao Xiaojuan |
February 25, 2009, Wednesday
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CHINA'S pension plans have long favored government workers, and a recent attempt at reform may further widen the gap in benefits between state employees and other workers.
Under a pilot project, government workers would continue to enjoy comfortable monthly retirement pay, fully financed by the state. Workers in public institutions, however, would not continue to enjoy such a privilege.
Public institutions in China mainly include the education sector, hospitals, public libraries, museums and research institutes, as well as some press and publication institutions, most of which are owned and run by the government and thus not profit-oriented.
According to the new project, public institutions and their employees will have to jointly pay insurance premiums. Some estimated the new scheme would slice in half the current pensions for such employees.
Five local governments, including those of Shanghai and Guangdong, were asked to experiment the proposal in late January.
Corporate employees have long been supported by their employers, whose management and profitability decide the welfare of their retirees.
People working for public institutions have so far got a higher level of pension than people working for companies. It's good to see the government is moving toward removing the inequalities within the pension system, as this seems to promote social fairness, justice and fair play.
But the policy, drafted by the government, did not include government employees.
Both public institutions and government organs should be targeted as the country is revising its pension system.
However, government employees set up a policy that would not cut their own pension incomes.
The Ministry of Human Resources and Social Security, which drew up the plan, earned itself the nickname of "Ministry of Public Servants Security."
Under the existing pension system, public servants and workers at public institutions get up to 90 percent of their salary as a retirement pension.
But if that is lowered to be the same as that of enterprise employees, the pension will be roughly 20 percent of their salaries.
The preferential treatment for public servants runs the grave risk of discouraging further pension reform because the public is unhappy with the obvious unfairness.
The number of employees in public institutions in China is more than four times that of public servants.
Earlier reports said the reform could ease the government's financial burden, because 80 percent of the country's pension expense, or 100 billion yuan (US$14.6 billion), went to public institutions.
Some policy makers argued that government organs only account for 20 percent of the country's pension expense, thus pension reform of public institutions should come first.
But a CCTV's popular news program broadcast on February 5 showed that China's public servants spent up to 900 billion yuan each year on banquets, traveling at public expense and using public cars for private purposes.
Isn't the government missing the point if it really wants to tighten its belt?
All citizens are equal, and public servants are not superior to employees in public institutions and enterprises. Public servants should never consider themselves a "special interest group" and wield power without regard to the public interest.
The pension reform could take a huge step forward if government organs first set a good example to public institutions.
(The author is a senior writer at Xinhua news agency.)
Under a pilot project, government workers would continue to enjoy comfortable monthly retirement pay, fully financed by the state. Workers in public institutions, however, would not continue to enjoy such a privilege.
Public institutions in China mainly include the education sector, hospitals, public libraries, museums and research institutes, as well as some press and publication institutions, most of which are owned and run by the government and thus not profit-oriented.
According to the new project, public institutions and their employees will have to jointly pay insurance premiums. Some estimated the new scheme would slice in half the current pensions for such employees.
Five local governments, including those of Shanghai and Guangdong, were asked to experiment the proposal in late January.
Corporate employees have long been supported by their employers, whose management and profitability decide the welfare of their retirees.
People working for public institutions have so far got a higher level of pension than people working for companies. It's good to see the government is moving toward removing the inequalities within the pension system, as this seems to promote social fairness, justice and fair play.
But the policy, drafted by the government, did not include government employees.
Both public institutions and government organs should be targeted as the country is revising its pension system.
However, government employees set up a policy that would not cut their own pension incomes.
The Ministry of Human Resources and Social Security, which drew up the plan, earned itself the nickname of "Ministry of Public Servants Security."
Under the existing pension system, public servants and workers at public institutions get up to 90 percent of their salary as a retirement pension.
But if that is lowered to be the same as that of enterprise employees, the pension will be roughly 20 percent of their salaries.
The preferential treatment for public servants runs the grave risk of discouraging further pension reform because the public is unhappy with the obvious unfairness.
The number of employees in public institutions in China is more than four times that of public servants.
Earlier reports said the reform could ease the government's financial burden, because 80 percent of the country's pension expense, or 100 billion yuan (US$14.6 billion), went to public institutions.
Some policy makers argued that government organs only account for 20 percent of the country's pension expense, thus pension reform of public institutions should come first.
But a CCTV's popular news program broadcast on February 5 showed that China's public servants spent up to 900 billion yuan each year on banquets, traveling at public expense and using public cars for private purposes.
Isn't the government missing the point if it really wants to tighten its belt?
All citizens are equal, and public servants are not superior to employees in public institutions and enterprises. Public servants should never consider themselves a "special interest group" and wield power without regard to the public interest.
The pension reform could take a huge step forward if government organs first set a good example to public institutions.
(The author is a senior writer at Xinhua news agency.)
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