Policies linking urban and rural social insurance will be introduced urgently, affecting the vital interests of urban and rural residents

   January 8 - The "Interim Measures for the Transfer and Continuation of Basic Old-Age Insurance Relations for Urban Enterprise Employees" (hereinafter referred to as the "Measures") has been fully implemented for more than a week. Peng Shuai and his 3 fellow townsmen still cling to the hope of getting back the 8% of old-age insurance premiums they paid, lingering outside the social insurance center on Bagualing Bagua Road, Futian District, Shenzhen.

Eight days earlier, at the same location, it was packed with people. On December 31, 2009, the number of people withdrawing from social insurance in Shenzhen reached 18,000, the largest "wave of insurance withdrawals" in Shenzhen's history.

The system designers have clearly already realized the "confusion" of people like Peng Shuai. On January 7, Hu Xiaoyi, Vice Minister of Human Resources and Social Security, led a team to Dongguan to conduct research on the transfer and continuation of old-age insurance. "What is yours is still yours." During an on-site investigation at the Chang'an Branch in Dongguan, Hu Xiaoyi comforted a migrant worker from Hubei.

One major breakthrough of the "Measures," regarded as a good remedy for the "wave of insurance withdrawals," is that not only can the individual account be transferred in full with the insured person, but part of the pooled fund (unit contributions) can also be transferred along with the insured person. However, by comparison, another new rule in the "Measures" is not very popular, namely that from the date the "Measures" took effect, insurance withdrawals are no longer processed.

But Peng Shuai's practical consideration is: "The 'Measures' clearly stipulate that insured persons must have paid contributions for 15 years before they can enjoy the old-age pension benefits as prescribed, and they may not withdraw midway. I have a rural household registration and only participate in urban old-age insurance because I work in the city. I have not participated in the New Rural Pension (New Rural Social Old-Age Insurance) either. At most I will work for another 5 years before returning home. It is impossible for me to wait 15 years and then take out the thousand or so yuan I paid this year, right?"

According to statistics from Shenzhen's social insurance department, in 2009 more than 5.8 million people in Shenzhen participated in basic old-age insurance, and the number of insurance withdrawals reached 1 million person-times. As the city with the largest migrant population, most of the more than 1 million people in Shenzhen who joined last year's "wave of insurance withdrawals" had "confusion" similar to Peng Shuai's.

New rules "indigestible"

The Shenzhen Social Insurance Individual Service Center located in Bagualing, Futian District, Shenzhen, welcomes a peak wave of insurance withdrawals at the end of each year. Unlike previous years, the wave of people withdrawing insurance in 2009 was even fiercer.

Peng Shuai, who works at an electronics factory in Longgang District, Shenzhen, told reporters that he is from Xiangfan, Hubei. He came to Shenzhen to work in 2005. Now the factory's performance is poor, and he plans to move to the Yangtze River Delta next year. Worried that the insurance transfer procedures are cumbersome, he has the idea of withdrawing from insurance.

In order to enable highly mobile migrant workers to truly enjoy social security, the State Council recently issued the "Measures," proposing that when insured persons move across provinces for employment, their old-age insurance relations should be transferred along with them to the place of employment. After transferring the old-age insurance relations and funds, the contribution years before and after the move (including deemed contribution years) shall be calculated on a consolidated basis, and the amount stored in the individual account shall be calculated cumulatively, ensuring that insured persons can enjoy old-age retirement benefits upon reaching the statutory retirement age. The "Measures" began implementation on New Year's Day 2010.

For the vast number of migrant workers, the cross-province transfer stipulated in the "Measures" does indeed solve issues such as the continuous payment of social insurance for this population brought about by mobility. Taking Shenzhen as an example, after the implementation of the "Measures," on the first working day of 2010, January 4, Shenzhen processed a total of 809 insurance transfers, of which 807 were cross-province transfers.

But the new rule of no longer processing insurance withdrawals still caused concern among some migrant workers, especially some older migrant workers who find it difficult to "accumulate 15 years of participation."

From its introduction on December 28 last year to full implementation on January 1, 2009, the "Measures" did not give the public much time to "digest." Migrant workers' lack of understanding of the new old-age insurance transfer policy was the main reason leading to insurance withdrawals.

Urban-rural pension linkage policy to be introduced

According to Hu Xiaoyi, there are currently 150 million migrant workers working in cities nationwide. According to public data from the Ministry of Human Resources and Social Security, as of the end of 2008, 24.16 million migrant workers nationwide participated in urban insurance, accounting for only 17% of migrant workers employed in cities and towns.

As early as March 2006, the State Council issued the "Several Opinions on Solving the Problems of Migrant Workers," proposing to explore an old-age insurance system suited to the characteristics of migrant workers, and to step up research on old-age insurance measures for migrant workers with low rates, broad coverage, transferability, and the ability to connect with the current old-age insurance system. At the end of 2009, the originally planned "Measures for Migrant Workers' Participation in Basic Old-Age Insurance" was folded into the "Interim Measures for the Transfer and Continuation of Basic Old-Age Insurance Relations for Urban Enterprise Employees."

However, the existing problems cannot be avoided.

At present, only about 10% of counties and cities nationwide are conducting pilot programs for the "New Rural Pension," and after the implementation of the migrant worker old-age insurance transfer policy stipulated in the "Measures," detailed rules for the transfer and connection between urban employee old-age insurance and the New Rural Pension were not introduced at the same time. This has caused some migrant workers returning home to farm to face a situation in the short term where their social insurance relations cannot be continued. This is also one of the causes of the "wave of insurance withdrawals."

According to disclosures from Dongguan's labor department, Pi Dehai, deputy director of the Social Insurance Center of the Ministry of Human Resources and Social Security, who traveled with Hu Xiaoyi to Dongguan for research, said that under the current policy, there is no problem with transferring and continuing old-age insurance within the scope of urban employee old-age insurance. On the issue of the "New Rural Pension," on the one hand, the state is stepping up the introduction of measures for transfer and connection between urban old-age insurance and the "New Rural Pension"; on the other hand, the pace of nationwide rollout of the "New Rural Pension" will also accelerate, and by then this problem will be alleviated.

Just two days earlier, when taking questions from netizens through the Chinese government website, Hu Xiaoyi said that the Ministry of Human Resources and Social Security is strengthening policy research on the basis of the "New Rural Pension" and the "Measures," and formulating policies for mutual connection between urban employee basic old-age insurance and the "New Rural Pension."