State Council, Decision on Improving the System of Basic Old-age Pension Insurance for Enterprise Staff and Workers

Issued: December 3 2005
Effective: as of date of issue
Applicability: In the event of a conflict between existing provisions and the Decision, the Decision shall prevail.

Main contents: The Decision expands the groups covered by basic old-age pension insurance. It stipulates that staff and workers in all types of enterprises, family proprietors and non full-time workers in urban areas shall join the basic old-age pension insurance scheme for enterprise staff and workers. The base figure for contributions to basic old-age pension insurance from family proprietors and non full-time workers in urban areas shall be the average wage for employed staff and workers in the locality in the previous year. The rate of contribution shall be 20%, of which 8% shall be deposited into the personal account. Starting from January 1 2006, the scale of a personal account shall be adjusted uniformly from personal contributions of 11% to 8% of a person's wages and formed wholly by personal contributions, with work unit contributions no longer being allocated to the personal account. The methods for distribution of basic old-age pension funds are also adjusted. Persons who start working after the State Council, Decision on Establishment of a Unified Basic Old Age Pension Insurance System for Enterprise Staff and Workers came into effect and have made contributions for 15 years in aggregate shall be given basic old-age pension funds each month after retirement. The basic old-age pension funds shall be composed of the base pension funds and the pension funds from the personal account. Persons who started working before the State Council, Decision on Establishment of a Unified Basic Old Age Pension Insurance System for Enterprise Staff and Workers came into effect but retired after this Decision came into effect and have made contributions for 15 years in aggregate shall be given transitional pension funds, in addition to the base pension funds and the pension funds from their personal accounts. Persons who reach the age of retirement after this Decision came into effect but have not made contributions for 15 years in aggregate will not be given the base pension funds but will be given the savings balance in their personal accounts in a lump sum, and the basic old-age pension insurance relationship will be terminated. Persons who have already retired before this Decision came into effect shall be given basic old-age pension funds in accordance with the original state provisions, and the adjustment method for basic old-age pension funds shall be implemented at the same time.
Related legislation: State Council, Decision on Establishment of a Unified Basic Old Age Pension Insurance System for Enterprise Staff and Workers, Jul 16 1997, CLP 1997 No.9 p.8