Merger brings more cash to China's rural pensions
Merger of retirement schemes brings better benefits to countryside, but meeting obligations may pose challenge for some poorer provinces
With his 60th birthday fast approaching, Cheng Zhidong decided it was time to finally put his financial future on solid footing.
So three years ago, Cheng, who farms in a rural part of Taizhou, in Jiangsu province, joined the pension scheme. He contributed 1,200 yuan (HK$1,525) the first year and 300 yuan in each of those that followed.
In December, when he hit the official retirement age, he began to receive payments of 80 yuan a month. "It's a good deal. I can get my money back in two years and will also continue to receive payment afterwards," he said.
Cheng's experience is exactly what Beijing wants as it seeks to extend pension coverage to more people, while also reforming the system to make it fairer to all recipients.
The State Council on February 7 announced that it would merge the pension systems for urban and rural residents at the national level and adjust how it subsidised payments for provinces. Fifteen provinces, including Jiangsu, have already merged the two schemes.
Giving rural residents at least some of the advantages city-dwellers enjoy would increase social mobility and address challenges posed by the mainland's ageing population, experts said.