Most urban employees in China worry about their pension plans, and the government's initiatives to restructure the current pension system have naturally aroused great concern among wage earners.

The most eye-watering part in the latest version of the reform is to separate people who are working for public institutions from government employees.

Government workers would continue to enjoy comfortable monthly retirement pay, fully financed by the state. Workers in public institutions would not continue to enjoy such a privilege.

Public institutions in China mainly include the education sector, hospitals, public libraries, museums and research institutes, as well as some press and publication institutions, most of which are owned and run by the government and thus not profit oriented.

According to the new initiatives, public institutions and their employees will have to jointly pay insurance premiums. Some estimated the new scheme would slice in half the current pensions for such employees. Five local governments, including those of Shanghai and Guangdong, were asked to experiment the proposal in late January.

The biggest rationale for the reform is the consideration that the government could not afford payment to the whole of the government work force. Company employees have been long supported by their employers, whose management and profitability decide the welfare of their retirees.

People working for public institutions get a higher level of pension than people working for enterprises. It's good to see the government is moving toward removing the inequalities within the pension system, as this seems to promote social fairness, justice and fair play.

But the policy, drafted by the government, did not include government employees. Both public institutions and government organs should be targeted as the country is revising its pension system. However, government employees set up a policy that would not cut their own pension incomes.

Critics questioned the web of conflicting interests that lay behind the reform plan, after it was issued. The Ministry of Human Resources and Social Security, which drew up the plan, earned itself the nickname of "Ministry of Public Servants Security".

According to the current pension system public servants and workers at public institutions get up to 90 percent of their salary as a retirement pension. But if that is changed to the same as enterprise employees, the pension will be roughly 20 percent of their salaries.

The preferential treatment for public servants runs the grave risk of discouraging further pension reform because the public is unhappy with the apparent unfairness.

The number of employees in public institutions in China is more than four times that of public servants. Earlier reports said the reform plan could ease the government's finance burden, because 80 percent of the country's pension expense, or 100 billion yuan, went to public institutions. Some policy makers argued that government organs only account for 20 percent of the country's pension expense, thus pension reform on public institutions should come first.

But according to a CCTV's popular news program broadcast on Feb. 5, China's public servants spent up to 900 billion yuan each year on banquets and traveling at public funds and using public cars for private purposes.Isn't the government missing the point if it really wants to tighten its belt?

All citizens are equal, and public servants are not superior to employees in public institutions and enterprises. Public servants should never consider themselves a "special interest group" and wield power without regard to the public interest.

Instead, the service-oriented government organs should take a lead in reforms when it comes to the interests of the general public. The pension reform could take a huge step forward if government organs first set a good example to public institutions.

Since the ageing population total has been increasing rapidly, the country is in urgent need of pension reform and a sound pension system. Another two drafts on pension insurance for migrant workers and cross-region transfer of pension funds for urban works was also made public in early February.

Urgent as it is, public opinions and public interests should always be considered first and utmost.

(Xinhua News Agency February 20, 2009)