China Labor News Translations explains how the Chinese government is ripping off migrant workers’ retirement pensions:
By law, Chinese employers are required to contribute to a government-administered retirement pension scheme for all employees. In theory, it sounds like this provides for some kind of security for migrant workers in their old age. But there is a catch. Migrant workers are highly mobile. In Guangdong province, for example, migrant workers only stay for an average of four to six years (People’s Daily, 8 January 2008 ) and in that time they may well move between several different cities. But when migrant workers leave their city of work, they cannot transfer their pension account either to their new place of work, or to their home town. Generally all they can do is cash in (tuibao) their own contribution. Their employer’s contribution – which is higher than the employee’s – stays with the local government. (Precise contributions differ by place. In Nanjing, for example, employees contribute 8 per cent of their salary, and employers contribute 14 per cent). This is essentially theft of migrant workers’ social security, and this aspect of China’s social security system is in need of urgent reform. No wonder local governments are so keen to enforce the social security regulation on enterprises that have are mainly staffed by migrant workers, because they gain an enormous amount from migrant workers’ social security contribution. That also explains why such factories are reluctant to take out insurance for their migrant workers because they knew that this large sum of money will not go back to the workers, but rather to the local governments….
More here.
