China raises pensions by 10 pct for enterprise retirees

China announced on Friday it will raise pensions to each enterprise retiree by 10 percent, starting January 1, 2012, in response to commodity price hikes and income growth.

This is the seventh consecutive year pensions for enterprise retirees have been adjusted, according to the Ministry of Human Resources and Social Security. The current average monthly pension per capita is 1,531 yuan ($242).

The adjustment is to raise the basic state pension by increasing it in line with the price level and earnings of average workers, while the pension rise for retirees with senior professional ranks or advanced age will be slightly higher than the average 10 percent.

By the end of 2011, some 364 million Chinese rural and urban dwellers had access to social pension insurance, and 87.59 million of them receive their pension on a monthly basis.

According to statistics published in the sixth national population census, there are over 118 million people above the age of 65, accounting for 8.87 percent of the total population in China.

"Some countries have adopted flexible retirement policies to address the problem of an aging population. However, the situation in China is complicated as this problem intensifies on one hand while on the other we face the challenge of a surplus labor force on the job market," Yin Chengji, the ministry spokesperson said at the press conference.

Yin said that the government was still doing research and soliciting opinions from various sides on the feasibility of extending the retirement age, as the government is very cautious about adopting new policies.

The ministry has improved the management efficiency and quality of the social security system, including the cross provincial transfer and renewal of endowment and medical insurance. In 2011, the total number of cross provincial transfers and renewals of basic endowment insurance and medical insurance reached 780,000 and 440,000 respectively.

Meanwhile, the social security system has been smoothly promoted among foreign workers in nine coastal provinces and cities. In Beijing, 7,800 foreigners started to pay into the system.

"Great emphasis and attention has been paid to foreigners joining China's social security system. We are trying our best to improve the service and to address problems which have emerged. We hope that we can provide more timely and accurate information to them so that they can be well informed about the application procedures," Yin remarked.

China's social security funds cover pensions, medical care, unemployment, maternity and work-related injury insurances.

Yin revealed the country collected 2.37 trillion yuan of the funds in 2011, up 26 percent year-on-year. The balance of social security funds amounted to 2.87 trillion yuan by the end of last year, including 1.92 trillion yuan for pension funds.

The State Council has also approved regional governments to entrust some foundations to manage the pension funds in pilot provinces, so as to preserve and increase the value of the fund, Yin said.

In 2011, a total of 12.21 million urban jobs were created, a record high since 2007, while the registered urban unemployment rate stayed at 4.1 percent despite a national economic slowdown.

He also pledged to establish an information sharing and reporting system for major labor disputes this year to crack down on illegal employment, and that those infringing upon the rights of laborers will be severely punished.