Chinese government employees are now accounted for additional payables in the new pension standards set by the government. (Photo : Reuters)
In its heightened effort to develop a sustainable and multi-level pension scheme, China has recently announced the details of the occupational pension standards for its government employees.
Based on the mechanism, a government department will be required by the welfare fund to pay 8 percent of its total salary, while a government employee will have to give 4 percent of the amount of his or her taxation-based salary.
This is according to the announcement released by the country's cabinet, State Council, on Monday.
The welfare fund serves as a supplementary part of China's fundamental pension system and commercial insurance.
Moreover, the benchmark for the employees' payment base will be the same as those provisions included in the basic pension system. The fund sources will also cover legal contributions in addition to related investment yield.
All those remaining from the fund will be left to qualified institutions including asset management companies, securities houses and insurers to aid in pension and investment administration.
The new occupational pension is eyed to retain talents as the Chinese government sees a possibility of compromise in its employees' welfare after the reforms in public institution's basic pension system.
In 2008, the government started to introduce reform programs in its organizations and agencies to make social insurances payment a requirement. The piloted programs have also required pension fund payment.
The new provisions in the pension programs are perceived as a means to promote social fairness.
Prior to the reforms, government employees are only necessitated to pay income tax.
