Towards portable pensions : the pension reforms in China and the impact of the recent extension of the pension coverage

Abstract

Recent years have witnessed China‘s legislative and governmental efforts to improve the social law regime. This thesis was structured right after the promulgation of China‘s Social Insurance Law, which entered into force on 1 July 2011, and has been updated to include the Urban-and-Rural Pension Conversion Measures and the Regulations on Public Institutions Personnel Management, both of which will enter into force on 1 July 2014. It is an attempt to objectively examine the accomplishments as well as the flaws in establishing portable pensions in China by, inter alia, employing comparative studies of provincial practices and depicting the recent extension of the pension coverage especially to the rural people.

This thesis questions whether the recent reforms could effectively tackle the unbalanced nature of China‘s traditional urban pension system and assesses the impact of the State Council‘s guidance on the new rural pension schemes, the urban residents pension schemes and the urban-and-rural residents pension schemes respectively. This thesis explores the factors impeding the establishment of portable pensions both from the aspect of the geographical portability of the pension benefits and from the convertibility between different categories of the pension schemes. It argues that the main difficulty in improving pension portability arises from the fragmentation of China‘s pension system, and, in particular, the dualistic structure of the traditional urban pension system, the urban-rural divide historically produced by the hukou system, and the lack of a clear demarcation of the central-local relations that could ensure a smooth inter-province transfer of pension funds.

This thesis should contribute to the most up-to-date studies about China‘s pension system by incorporating the most recent developments led by the Central Government and implemented at the provincial level. It compares the Shanghai Urban-and-Rural Pension Residents Scheme (2014), the Guangdong Urban-and-Rural Residents Pension Scheme (2013) and the Chongqing Urban-and-Rural Pension Scheme (2009) as an illustration of the latest endeavor to narrow the urban-rural divide and to improve the overall pension planning. While recognizing that pension portability would still be one of the thorniest issues in China for years to come, this thesis anticipates a better pension system in the foreseeable future as the highest leadership in China and the general public are increasingly paying more attention to social equality and the national administration of the pension schemes.