China’s 40m public sector employees are to lose their exemption from paying into the state pension system, as the government looks to curb public outrage over civil servants’ benefits.
The dual-track urban pension system, in which corporate employees must contribute 8 per cent of their salary to the pension system but government employees contribute nothing, has been a source of populist outrage for years.
The State Council, China’s cabinet, this week announced a plan that will move to equalise the two systems. The reform follows years of delays and intra-government wrangling. The State Council introduced a pilot pension reform in 2008 but it ran aground when professors and doctors began retiring early to avoid being ensnared by benefit cuts.