According to the research conducted in 1991 by the Research Center on Aging, 72.9% of the elderly urban population received benefits, whereas only 5.7% of the rural old population did so. Today, the actual living standards both in urban and rural areas are low, with great gaps existing between those areas, between age groups, and between the sexes. In reality, many old people are dependent on their families. In view of the current situation in China, it is impossible in the short term that the nation will solve the problem of supporting its old people, although it is hoped, as society and the economy develop, that society will increase pension funds and establish a social security system.
In 1995, China formally declared a policy in which an annuity insurance system would be implemented by linking the society unification plan with individuals' accounts.
All laborers, who have taken out the annuity insurance policies, are to open individual accounts, in which the insurance fees paid by themselves, as well as part of the fees paid by their employers for them, are recorded. Part of the fees paid by corporations will become social unified funds to pay annuities to the retired. The objectives are, by the end of this century, to increase the annuity insurance coverage and fund sources, implement various annuity insurance plans, and establish a comprehensive annuity insurance system combining the laborers basic annuity insurance, the corporate supplementary insured pension plan, the social unification plan, and individual accounts.
Currently, a number of regions nationwide are conducting their annuity insurance schemes on the basis of on the principle of combining the social unification plan with individual accounts. The coverage of the social unification plans differs between regions; some unification plans are implemented by provinces, and others by cities. Actual situations also differ between areas; some local populations established social insurance institutions to make the annuity insurance belong to local society itself, while other authorities let corporations pay pensions as they have in the past. In the meantime, the national scheme for annuity insurance is under the control of several bodies.
