Prc Social Security Scheme

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.

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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 employees 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 employees 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 employees 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.