Are there pensions in china

Labor regulations do not differentiate between male cadre and male workers. Beijing did not specify a target retirement age. By comparison, the current retirement age in the U. The global average was You of MOHRSS said that the retirement age was set in the early s, when people were expected to live about four decades.

In , life expectancy in China was Those numbers mean Beijing must raise the retirement age, according to You, who delivered the population figures at a press conference on February Current growth rates suggest the population of people who are 60 and over will exceed million sometime between and Dongliang Zheng, director of the Institute of Labor Science at MOHRSS, predicted last year that China's working-age population would decline sharply after , from a peak of more than million in to about million in According to Tsinghua University professor Dong, the portion of citizens aged 65 and above will increase sharply, before stabilising at the ratio of about one-third of the total population.

Some local insurance giants, including People's Insurance Company of China SS , and some mutual fund houses have been selling commercial pension products, but they are short-term, lasting no more than a few years.

China Pacific Insurance Group also sold longer-term products packaged with property investments, which was better received. Appointed insurers in the first private pension investment trial - in Shanghai, neighbouring Suzhou city and Fujian province - only lured some million yuan in purchases over the past three years.

For most low-paid workers, however, buying a property in the city remains a distant dream. In the vast majority of cases, migrant workers and their families are excluded from public housing. In larger cities, many migrant workers can only afford to rent small apartments in poorly constructed or dilapidated buildings in remote parts of the city, and even these dwellings can take up a sizable proportion of their monthly salary.

Nevertheless, if they are enrolled in the housing fund, migrant workers can sometimes use it as a secondary lump sum pension, but numerous bureaucratic obstacles often get in the way of actually securing these funds.

Under this regulation, both workers and employers must make payments to the basic medical insurance scheme which, like the pension scheme, comprises an individual account as well as pooled funds. Employer contributors are included in the pooled funds while worker contributions go to individual accounts.

Once the worker has paid into the system for the requisite number of years, they are eligible for benefits without having to make additional contributions.

The medical insurance fund pays for general outpatient expenses, treatment of serious illness and hospitalisation.

Different regions have different regulations on minimum and maximum payment amounts and reimbursement ratios for employee medical insurance. In April , a new round of reforms improved accounting methods and defined the scope for using individual accounts. After the April reforms, all employer contributions now go to the pooled insurance funds. Workers are now able to use their individual accounts to cover medical treatment for family members.

But in , the per capita cumulative balance of individual accounts stood at just 2, yuan. However, in most cases, workers have to pay up front and request reimbursement from the authorities later. Coverage for outpatient treatment and medicines is even more limited. This means that people who need outpatient treatment and medicine often have to buy additional private medical insurance, pay for treatment out of their own pocket or forgo treatment altogether.

In the past ten years, the number of employees and retired employees covered by the basic medical insurance for urban employees has increased steadily. According to the Statistical Bulletin of Medical Security Development in , as of the end of , the number of people participating in basic medical insurance for employees in China was approximately million. However, similar to the situation of pension insurance, the coverage of employee medical insurance for migrant workers and flexible employment groups is still limited.

It is estimated that the number of migrant workers with basic medical insurance in was only 62 million, accounting for about 22 percent of the total number of migrant workers at that time. In December , the State Council issued Opinions on Integrating the Basic Medical Insurance System for Urban and Rural Residents , calling for merging urban and rural resident medical insurance with the new rural cooperative medical insurance scheme into a unified insurance scheme.

In March , the National Medical Security Administration was established as part of government institutional reform. By the end of , more than 95 percent of the population 1. About 75 percent of those covered 1.

Of those covered by the employee scheme, 27 percent Data source: National Healthcare Security Administration. The main urban worker basic medical insurance fund, on the other hand, paid out an average of 3, yuan per person. In , per capita hospitalisation expenses reached 9, yuan, far exceeding per capita benefits paid out from either insurance scheme. There are significant regional differences in the level of expenditure from employee insurance schemes.

In the north-eastern province of Jilin, which has a higher concentration of elderly, per capita expenditure was 2, yuan. In Guangdong, which has a higher working age population, it was 2, yuan. There is also a massive disparity between urban and rural areas in terms of healthcare resources.

On average, the number of hospital beds per 1, people in most cities is twice that of rural areas. Doctors in rural areas face extreme work pressures, heavy workloads and low pay. At the end of , there were only , village doctors nationwide. Data from the last five years shows that the number of village doctors has dropped sharply at an average annual rate of 50, In , for example, doctors from villages in Henan, Heilongjiang, etc.

Given the income gap between urban and rural residents, the disparity in social security coverage, and the allocation of medical resources, rural residents are at an absolute disadvantage when it comes to access to medical services. The situation is so unbalanced that some scholars have argued that low-income groups are actually subsidizing the medical care of higher-income groups. The Opinions on Comprehensively Promoting the Consolidation of Maternity Insurance and Basic Medical Insurance released in announced that mergers would continue nationwide, and the merger process is currently ongoing.

The government claims the merger will simplify the contribution process for employers and not place any additional burden on employees, while maintaining existing benefits for mothers and their spouses.

Maternity insurance covers all maternity-related medical costs, including birth control, prenatal check-ups, delivery and antenatal care, as well as allowances to be paid during maternity leave. Women who are not covered by maternity insurance can be reimbursed for part of their maternity medical expenses in accordance with the medical insurance reimbursement rules.

Some local governments require employers to provide additional allowances for employees earning more than the average wage. Following the introduction of the two-child family planning policy in , various local governments established incentives to working mothers, including extending maternity leave anywhere from an additional 30 days to days.

There is considerable disparity in the benefits offered between regions and it remains difficult, even after the merger of medical and maternity insurance, for women to claim benefits. Women who do not comply with family planning policies or do not have employee medical insurance cannot enjoy any benefits. Women in informal employment, without stable employment, or who are migrant workers are usually left without support. In , official figures show that million workers were covered by maternity insurance nationwide, of which an estimated 4.

However, there were From this, we can see that less than one-third of women who give birth are covered by maternity insurance and even fewer received those benefits.

However, this new policy could lead to even greater gender discrimination in the job market. Already, women are often asked about their family plans and are sometimes forced to sign illegal contract conditions that require them to take pregnancy tests or guarantee that they will delay pregnancy or not get pregnant at all. Many employers find ways to coerce pregnant workers into resigning by making them work unreasonably long hours or assigning them heavy or dangerous workloads.

As a sustainable pension system is built with the collective effort of government, employers, providers and individuals, we expect Chinese retail customers to take a more proactive role in managing their pension money. Pension managers will need to be ready to meet their unique demands. KPMG Personalization. Get the latest KPMG thought leadership directly to your individual personalized dashboard.

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