Public institutions will have to start contributing 20 percent of employees’ salary to their pension fund and develop an annuity arrangement, according to the country’s latest reform.
The current dual pension system has reached its final stage, the official website of the Chinese government unveiled. The new reforms are expected to “increase fairness” in the pension system the website wrote.
This is the first time that the public sector has shared a unified pension system with enterprise retirees. According to the guideline, employees of public institutions need to pay 8 percent of their salary as a pension premium.
China has the largest senior population in the world, with 194 million people at or above the age of 60, according to the China National Committee on Aging.
Pension reform was first launched in 2008 as a pilot program in various provinces and municipalities including Guangdong province and Shanghai.