Pension payment, healthcare needs 'will be solved'

The Chinese government will do its best to solve issues concerning people's livelihoods, such as pension payments and health insurance, Premier Li Keqiang promised on March 16.

Despite reports of pension payment difficulties in some places, "there will be absolutely no problem for the government to meet the public's pension payment needs", he said at the end of the annual session of the legislature, the National People's Congree.

The national pension insurance reserve recorded a surplus of 340 billion yuan ($52.1 billion; 46.9 billion euros) last year, taking the cumulative figure to 3.4 trillion yuan since it was established in the late 1990s, according to the Ministry of Human Resources and Social Security.

Moreover, the central social security fund of 1.6 trillion yuan can serve as a strong backup for pension payments nationwide, Li said.

The central government set up the pension insurance reserve in 1998 to meet the increasing needs of retirees. In 2014, reports that retirees could not obtain their pensions began to make headlines, with most cases occurring in Northeast China, the country's old industrial base. Many workers in the region have been laid off, with enterprises closed due to restructuring reforms since the mid-1990s.

Ni Huping, the official in charge of pension programs for the Zhejiang Provincial Civil Affairs Department, says the problem occurred because of insufficient premium input in a fledgling pension insurance system. He describes the shortage of funds as "a debt left by history".

Over the past 40 years, China had also implemented a policy limiting most couples to having only one child, which has been cited as one of the reasons for a rapidly aging society. This has led to observers forecasting that the nation faces a challenge, as pension payments will not be sustainable.

By the end of 2014, China had 212 million people age 60 and older, accounting for 15.5 percent of the population. The so-called gray population is expected to reach 400 million by the middle of the century.

To solve this problem, the government is considering plans for delayed retirement, with an implementation plan to be issued in 2017, Yin Weimin, the minister of human resources and social security, said at the legislature session.

Ni suggests other measures be taken to help ease pension payment pressure, such as making the pension system more independent and transparent, and setting up a risk prevention system.

Premier Li said he is confident the pension problem can be solved, adding that this will not be "an empty promise to ensure that the elderly are provided for".

Affordable healthcare is another major concern. As part of the ongoing healthcare reforms, direct settlement of hospital expenses for retirees in areas away from their hometowns will be realized in two years, Li said.

Currently, health insurance policies in China are restricted regionally, and many retired people find it hard to get their medical bills reimbursed if they go to hospitals outside their hometowns.

"The government is resolved to achieve national portability of medical insurance plans at a faster pace," Li said, adding that provincial-level portability will be achieved within the year. "All the government's work aims to improve the public's well-being, so we need to cater to people's wishes for a better life as we strive for development and reform."

China has a two-tier public health insurance policy system - one for urban employees and the other for the unemployed in rural and urban areas. More than 96 percent of the population has been put under this umbrella.

Responding to complaints that the burden is too heavy for individuals and their employers to pay in to insurance plans that cover pensions, healthcare, unemployment, workplace safety and maternity, Li said, "There is still room for us to cut the ratio of contributions to these insurance plans."

An employee with a monthly salary of 8,000 yuan can only receive 5,000 yuan, with the rest going to the insurance plans. His employer has also to pay a proportionate amount to the plan.

shanjuan@chinadaily.com.cn

(China Daily Africa Weekly 03/18/2016 page5)