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January 9, 2010

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Pension drive for farmers

SOCIAL security workers have begun a massive doorknocking campaign to enrol farmers in a pioneering pension scheme in China's Jilin and Fujian provinces.

The government-subsidized scheme is aimed at China's estimated 800 million rural people.

A pilot scheme, expected to cover 1.3 million people in Jilin and 300,000 in Fujian, began on Thursday. The scheme is expected to expand across the country gradually every year.

"Government subsidized contributions to the pension plan can make it attractive and something that makes a real difference to the lives of elderly farmers," said Luo Dechun, head of Jilin's Human Resources and Social Security Department.

In Jilin, a resident can choose from five pension levels. The lowest costs 100 yuan (US$14.65) a year. Each higher level costs 100 yuan more a year. Government subsidies from 30 yuan to 50 yuan will be added into the account at each level. When the holder reaches 60, the monthly pension will be the amount of money in his account divided by 139 plus a government subsidy of 55 yuan and bank interest.

An account with deposits of 100 yuan annually for 15 years will be worth 70 yuan a month on retirement at 60.

"We wish to cover as many people as possible by setting the lowest level at 100 yuan, which is affordable for most farmers. For those who are already 60 or above, they can receive the 55 yuan monthly subsidy even if they do not put any money into the account," Luo said.

"Farmers in Jilin had an annual income of 4,500 yuan per capita in 2008. The pension would be enough for them to get by. In contrast, the old pension plan, which had no subsidy, provided way too little," Luo said.

The Fujian scheme has 12 levels, from 100 yuan to 1,200 yuan.


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