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China to Improve Pension System

China's State Council, or cabinet, has decided to improve the basic endowment insurance system for enterprise employees around the country, stressing the necessity of paying the pension on time and in full.

The coverage of the basic endowment insurance system should be expanded to all employees in all urban enterprises, private businesses and self-employed individuals, according to a State Council decision to this effect, promulgated on Dec. 3 this year.

Efforts to expand the coverage should be focused on non-state enterprises, urban private businesses and self-employed persons at present and in the near future.

The decision, made public Wednesday, also sets the proportion for paying the pension fund while asking proper treatment of the personal accounts of the fund.

The state will formulate provisions for the management and investment of the fund under the personal accounts in order to maintain and increase its value, the decision says.

Enterprises or individuals who refuse to pay or pay the fund in less will be dealt with according to law, it says.

The State Council promised that it will adjust the level of the basic pension of enterprise retirees in accordance with changes in the wages of employees and prices.

The State Council encourages capable enterprises to establish an annuity system so that their employees could live a better life after retirement.

The decision also calls for improvement in services for retirees of enterprises.

China's basic endowment insurance system was established in 1997. However, its coverage lags behind the increase of the aging population, the diversified modes of employment and growing urbanization, said an official with the Ministry of Labor and Social Security.

Thus improving the system is of great significance to maintaining the overall situation of the country's reform, development and stability and to the nationwide endeavor to build a harmonious society, the official said.

(Xinhua News Agency December 15, 2005)

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