China's Vice-Premier Ma Kai gave a report at the ongoing bi-monthly session of the National People's Congress Standing Committee on Tuesday, saying the country will reform its pension system for staff in government bodies and public institutions, to bring and the disparate private sector system in line.

China to overhaul dual pension system

A dual pension system, that's what China has in place currently. Under the system, civil servants and employees in state agencies don't need to pay for their pensions. Instead, the government fully supports them. However for those who are employees in private enterprises, they have to pay 8% of their salary to the pension account.

After retirement, private urban employees usually get a pension equal to about half of their final salary, but civil servants get much more without making any financial contribution at all. No doubt, some people see this as unfair.

"Some civil servants retire around the age of 50 but can get a pension of five or six thousand yuan per month. I'm 70 years old now and I get 3000 yuan per month. This is unfair," says a retiree in Guangzhou.

"My mother in law only has a monthly pension of 2100 yuan. She worked for 30 years. I know many people have pensions of more than ten thousand yuan per month. That's a huge difference," says a Guangzhou resident.

The different methods of payment, accounting and management in China's public pension systems have resulted in widespread disputes.

"Those who contribute a lot at work deserve high salaries. But after retirement there is no reason for them to get that much more than others. The government should call for fairness and not widen gaps. The five-times gap is huge," says Ding Li, research fellow in Guangdong Academy of Social Sciences.

And now the reform is coming. The aim is to build a system for Party, government and public institution staff that is similar to the one employed by the private sector.

This move will affect around 37 million people including the in-service 7 million civil servants and 30 million public institution staff.

China has the world's largest number of civil servants and staff of publicly-sponsored institutions. And the country's population is expected to reach 1.43 billion by 2020. The State Council is making efforts to unify the nationwide management of the pension system to cover the entire population.

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