New pension plan to benefit China’s 900 million farmers

• Source: Global Times
• [01:59 August 05 2009]
• Comments

“I feel happy that farmers can get a pension now, although it’s not that much. As you know, only workers in the cities can get it,” Chen Dajin, a 63-year-old farmer in Tangwei county, Suzhou, said, adding that he and his wife can get 300 yuan in pension every month.

In Suzhou, a city in Jiangsu, men over 60 and women over 55 can receive the retirement pension each month, without paying any money.

The biggest obstacle in applying for the new insurance is the low revenue of local governments.

“Local governments with low revenue have no capability to promote the new policy. With no financial support from the local government, the related department has no enthusiasm to promote the new insurance,” said Ding Yifan, a researcher at the Development Research Center of the State Council.

While the old insurance allowed for management fees for the government, the new one prohibits the local government from extracting any management fees from the funds.

“The new insurance policy strives to achieve two things: one, to reduce the economic and policy gap between urban and rural areas, and the other is to solve the difficulties faced by the elderly in rural areas and help with implementing a rural population policy,” Ding said.

Once put into action, the trial program will have a huge influence on China’s social security system, as it encourages farmers to purchase endowment insurance for a more secure life, according to Ding.

Ding suggested that the governments make a reasonable and balanced financial contribution.

He also called on the government to promote and implement this new endowment insurance policy as soon as possible.

Zhang Han contributed to this story