Civil Service and Military Service Pensions In China

Abstract

As quoted by Palacios and Whitehouse, there are separate pension schemes for civil servants in about half the world’s countries. This includes the People’s Republic of China. In some countries pension costs for public sector employees form a disproportionately large part of the total pension expenditure, and this applies to China. Whereas a considerable volume of material is available on the Chinese national pension systems, there has been far less study of the pension arrangements in place for the civil service, public service employees and military personnel in China. Indeed it has proven particularly difficult to obtain reliable and accurate information as to the pension arrangements for the People’s Liberation Army. Of course pension provision worldwide is attracting a great deal of attention because of its importance at a micro level, i.e. as replacement income for individuals after retirement, and at a macro level, viz. the impact on the overall economy of both funded and unfunded arrangements. The major pressures affecting the different pension systems in China, and indeed worldwide, include: - rapidly improving life expectancy; - changing work patterns, including greater labour mobility; - the effect of the global financial crisis on pension assets and on government budgets. This paper will describe the main elements of pension provision in China, i.e.: - state pension system for urban workers;- supplementary benefits for urban workers;- the National Social Security Fund;- the proposed rural pension system;- civil service and public servants pensions;- the military pension system. A description of certain reforms affecting public servants is given, together with comment on the desirability of further harmonising the various pension arrangements in China