Mrs. Cheng’s husband works for a government institution, where he receives a monthly salary of RMB 6,000. Under the current system, an enterprise employee with the same salary would have to pay eight percent of their salary to their personal account to receive a pension of RMB 3,000 every month. Mrs. Cheng’s husband, however, is not required to pay any contributions out of his salary, and will receive RMB 5,000 after retirement.

In order to narrow the gap between workers of government institutions and enterprise employees, the Chinese government has raised the per capita monthly pension for retired enterprise employees for eight consecutive years at an annual increase of 10 percent. The Outline of the 12th Five-year Plan for Social Security released in June included reform of the pension plan for government institution employees. One director of the Human Resources Department of a government institution told China Today that several public institutions under the conglomerate she serves have been transformed into enterprises and they and their staff have both started to pay pension contributions.

Professor Chu Fuling of the School of Insurance under the Central University of Finance and Economics says that the basic framework for China’s pension system has been established, but that it needs to be improved step by step.

The ultimate goal of the reform is to make the system fair for everyone. Now almost every rural and urban resident has access to pension plans, though pensions are still low. However, with China’s continual economic development and accumulation of wealth, it is inevitable that people will see the benefits filter through to their golden years.