BEIJING, Feb. 26 (Xinhua) -- The State Council, China's Cabinet, announced on Wednesday the country will build a fair, unified and standardized pension system for its rural and urban population before 2020.
The scheme, together with other social assistance and benefits, will better safeguard seniors' basic lives, according to a cabinet document that seeks to unify the current basic pension systems that have led to unequal benefits among urban and rural residents.
Urban residents have enjoyed better basic pension benefits compared to those in the countryside under the separate pension systems, but the new rule seeks to change that and make the system fairer, regardless of people's urban or rural identities.
Under the new urban-rural resident pension scheme, residents' annually paid pension insurance, government subsidies and other contributions together form the fund pool, which will start paying pensions to residents after they reach the age of 60.
Meanwhile, residents will be required to make insurance payments for 15 years before they receive monthly pensions. They also have 12 annual insurance payment options ranging from 100 yuan per year to 2,000. The higher the annual insurance payment, the more monthly pension a resident will receive.
The basic pension scheme seeks to provide assistance to the basic livelihood of unemployed urban and rural residents, and does not cover government staffers or registered urban workers, who receive retirement pensions that carry better benefits.
"The unification of basic urban and rural pensions will particularly benefit China's migrant workers and their families," said Hu Xiaoyi, vice minister of human resources and social security.
A unified pension system ensures that migrant workers from rural regions will still enjoy basic pensions even if they become urban residents, Hu said at a press conference.
Meanwhile, migrant workers will also have the opportunity to receive retirement pensions as registered workers do, after they pay relevant monthly insurances for 15 years, according to a new rule announced on Wednesday by the Ministry of Human Resources and Social Security and the Ministry of Finance.
Their urban-rural basic pensions and retirement pensions will become interchangeable in accordance with regulations, according to the new rule that takes effect on July 1.
Luo Baihu, a migrant worker from central China's Hunan Province, has never paid monthly pension insurance because he was worried his money would be wasted. He only pays the basic urban-rural pension insurance.
He is relieved knowing that the money he spent on buying different insurances will be interchangeable between different pension accounts.
Zhou Tianyong, a professor at the Party School of the Central Committee of Communist Party of China, said that the new rule could encourage migrant workers to change their urban-rural basic pension to a retirement pension, which carries more benefits and better guarantees at old age.
Official data showed that China's migrant workers numbered 269 million at the end of 2013.
The basic rural and urban pensions for residents, together with retirement pensions for registered workers, covered 820 million people at the end of last year, government data showed.