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Lenovo introduces corporate pension scheme

By Fu Jing (China Daily)
Updated: 2006-07-07 08:16

Before the programme, for example, an average retiree could receive a 1,300 yuan (US$160) monthly pension, while an average employee could earn 6,000 yuan (US$750) per month.

After the pension programme is implemented the same retiree could receive up to 3,600 yuan (US$450) per month, or 60 per cent of their previous salary.

Lenovo has selected corporate pension service providers Ping An Endowment Insurance Company, China Merchants Bank and Harvest Fund Management Company Ltd to serve as trustee, custodian and investment manager, respectively, of the new scheme.

Liu Junsheng, a researcher with the Labour-Wage Institute under the Ministry of Labour and Social Security told China Daily the new pension schemes could greatly improve retirees' quality of life, if they are implemented nationwide.

Liu is concerned that retirees in China currently receive relatively low pensions compared with those still in work.

Statistics indicate the average pension is currently only 20 per cent of the average employee's wage. In developed countries it is between 40 and 60 per cent of the average wage.

"If the rate continues to be this low, retired people will not be able to improve their lives," said Liu. "New measures are urgently needed as China is an aging country."

He said China's population is growing older at an ever-faster pace and more than half-a-billion rural and urban workers don't participate in state-run social security schemes.

And China's implicit pension debt could climb to as much as 9.15 trillion yuan (US$1.14 trillion) during 2001-75, according to the World Bank.

"All the facts indicate the urgency for us and companies to save and invest for retirement," said Liu.