Pension transfer rules take effect Jan. 1

New rules from the central government taking effect January 1 will allow migrant and urban workers to transfer funds from their pension accounts to different provinces if they move, according to draft guidelines of the rule issued following an executive meeting of China's State Council last week.

At present, workers who leave their jobs and move to work in another province have their pension fund, which grows in accordance with the number of years worked, revert to zero.

"This is a milestone for the country's pension insurance history, and will help to boost the country's economy by encouraging cross-regional flow of workers," Chu Fuling, a professor with the China University of Finance and Economics, said Monday.

Migrant workers praised the new guidelines.

"If the pension fund could not be transferred, the funds that I submitted in the previous three years would be wasted,"a worker named Wang Minghui, who came back to Beijing after working in Guangzhou for three years, was quoted by the China Times as saying.

"Although I don't care too much about this because I am still young, some of my senior colleagues have had to give up job opportunities in other cities for fear of losing the funds they have paid for," Wang said.

But Chu said some technical issues must be resolved and detailed guidelines in different provinces need to be perfected in the future.

And analysts were quoted by the China Times as saying that the shifting of funds in and out of pension accounts needed to be made more convenient.

The guidelines released by the State Council also said a small part of the pension funds won't be returned to employees who leave for new jobs in other regions. That sparked anger in some online forums and blogs, with posters wondering why all of the funds would not be returned to them.

But Chu said the move was already a big boost for workers from the central government.

"Some local pension management departments would not be happy if the funds paid by companies or units in their areas are totally transferred to other provinces or departments, and we need reform gradually," he said.

Chu added that the guidelines have been in the works for several years and were already a big achievement.

New pension fund rules benefit migrant workers

The State Council has announced interim measures that will make it easier for workers to transfer what they've paid into pension funds from one province to another. This new move is most likely to benefit migrant workers who are frequently on the move. Full story >>

China launches trial for new rural pension system

China is taking another step to expand its pension system, with the launch of a trial scheme in certain parts of the country. The eventual aim is to allow 700 million people living in rural areas to get the same payouts as retirees in urban areas. The move is part of ongoing efforts to reduce the gap in living standards between cities and the countryside, while also boosting consumption by tapping a potentially huge market in China's rural areas. Full story >>

China to raise pension fees 
 
China is set to raise pension fees for corporate retirees, while also standardizing pension payouts for cities across the country. Details were revealed at a regular meeting of the State Council, chaired by Premier Wen Jiabao on Tuesday. Full story >>