Beijing sets occupational pension standards for civil servants

Want China Times, Xinhua 2015-04-07

A senior center in Yuncheng, Shanxi province, March 19. (File photo/Xinhua)

China announced detailed standards of occupational pension for government employees on Monday as a move to build a multi-level, sustainable pension mechanism.

The welfare fund, as a supplementary part of the basic pension system and commercial insurance, will require a government department to pay 8% of its total salary amount and a government employee to contribute 4% of their taxation-based salary, according to an announcement released by the State Council, China's cabinet.

The benchmark for the payment base is the same with that of the basic pension and the fund sources also include related investment yields and other legal contributions.

The fund will be left to qualified institutions such as securities houses, asset management companies an insurers to manage the pension and conduct investments.

The introduction of occupational pension is expected to retain talent as recent reforms in the basic pension system for government institutions might compromise employee welfare.

China started pilot reform programs in government organizations to require them to pay social insurance and pension funds like other private employers in 2008 to promote social fairness. Before that, government employees only had to pay income tax.