Prc Social Security Scheme Essays - Economy, Money, Finance

Prc Social Security Scheme PRC Social Security Scheme Major Characteristic of PRC Social Security Scheme - Only applicable to Chinese local employees - Local requirements may vary from locality to locality. Structure of Social Security Scheme - Pension - Unemployment Insurance - Medical Insurance - Housing National Requirement - Pension ?Decisions of the State Council Concerning the Establishment of a Unified System of Basic Old-age Insurance for Staff and Workers of Enterprises?(July 16, 1997) Structure of the Basic Pension Scheme - Requires mandatory participation by enterprises and employees; - Comprises 2 elements: a. Basic Pension Pooling Account b. Basic Pension Individual Account Enterprise Contribution - Maximum contribution of 20% of the total wages of the enterprises in general unless approved by Labour Bureau and Ministry of Finance. - For a foreign investment enterprise, the total wages only cover Chinese local employees' wages. - Among the 20% contribution: a. start at 7% of employee salary in 1997, to be gradually reduced to 3%, for contribution into the Basic Pension Individual Account b. 13% to 17% goes to Basic Pension Pooling Account Employee Contribution - Start at 4% of employee salary in 1997, to be gradually increased to 8% - Contribution goes to Basic Pension Individual Account National Requirement ? Unemployment Insurance ?Unemployment Insurance Regulation ? issued by State Council on January 22, 1999. Mandatory participants - Requires mandatory participation by enterprises and employees; - ?Enterprise? refers to ?Urban enterprises and institutions?, including: a. State-owned enterprises; b. Urban collective enterprises; c. Foreign investment enterprises; d. Urban private enterprises; and e. Other urban enteprises - ?Employee? refers to ?Staff and workers of urban enterprises and institution? Contribution - Employer contribution - 2% of the total wages of the enterprises; - Employee contribution - 1% of the employee's wage National Requirement ? Medical Insurance ?Decisions of the State Council Concerning the Establishment of a Basic Medical Insurance System for Urban Staff and Workers ? issued by State Council Mandatory participants - Requires mandatory participation by enterprises and employees; - ?Enterprises? refers to ?all urban enterprises?, including: a. State-owned enterprises; b. Urban collective enterprises; c. Foreign investment enterprises; d. Urban private enterprises; e. Government organizations, institutions; f. Social organizations; and g. Non-governmental non-enterprise units. - ?Employees? refers to ?employees of the above-mentioned enterprises? Contribution - Employer contribution ? approximately 6% of the total wages of the enterprises; - Employee contribution - 2% of the employee's wage National Requirement ? Housing ?Administrative Regulation on Housing ? issued by the State Council on April 3, 1999. Mandatory participants - Requires mandatory participation by enterprises and employees; - ?Enterprises? refers to ?all urban enterprises?, including: a. Government organizations, institutions; b. State-owned enterprises; c. Urban collective enterprises; d. Foreign investment enterprises; e. Urban private enterprises; and f. Other Urban enterprises. - ?Employees? refers to ?employees of the above-mentioned enterprises? Contribution - Employer contribution ? minimum contribution 5% of the total wages of the enterprises; - Employee contribution ? minimum contribution 5% of the employee's wage Local Requirements Local requirements regarding contribution ratios may be different from national requirements, which vary from locality to locality based on the relevant regulations stipulated by local governments. A Summary of contribution rations (expressed as a percentage of the employee gross wages) to social security funds in the following cities (as of July 1999) Social Issues