REN JUNCHUAN: LITTLE RED BOOKS: Retired workers in Ordos, Inner Mongolia, receive bankbooks listing their pension contributions. The new social insurance draft law specifies a common right for citizens to pay premiums and enjoy social insurance for medicare, work injuries, unemployment and childbirth

Zhao Yanfang, 25, is an engineer at a designing institute in Beijing. After she graduated from a university in Jiangsu Province in 2005, she worked for a private company in the city of Changzhou for a year. Like most other employees, she regularly contributed to an endowment insurance fund, which would later provide her with a pension after retirement.

But when she landed a new job in Beijing in 2006, she stopped making payments to the fund in Changzhou and started contributing to a new one in the capital. Because endowment insurance funds are collected separately by provincial-level or municipal-level governments in China, workers can only receive pensions in the cities where they pay their premiums after they retire.

The funds are part of the country's social security system, which provides comprehensive financial assistance for retirees, the sick, the unemployed and those who suffer work-related injuries. The National People's Congress (NPC), the country's top legislature, first added s law on social insurance to its legislative agenda in early 1994, but it has taken 14 years for the NPC to issue a draft law.

On December 28, 2008, the Standing Committee of the 11th NPC made public its draft law on social insurance, the first of its kind in the country. Before being publicized, the draft was submitted to the Standing Committee of the NPC for the second deliberation on December 22, following the first review, which was carried out a year earlier. Public opinions will be solicited and submitted to the NPC by this February 15. The committee then will continue its review of the draft law.

Nationwide transferability

According to Xinhua News Agency, the draft law specifies a common right for both urban and rural citizens to pay premiums and enjoy social insurance for medicare, work injuries, unemployment and childbirth. It allows them to pay pension premiums in one place and receive payments in another place if they migrate to other cities or provinces. This clause is particularity significant, because the country has a much more mobile population now than in the past.

Many migrant workers cannot receive pensions after they retire, because various endowment insurance funds in different cities cannot transfer payments from one place to another, according to the current policy. A recent report in Caijing (finance) magazine said many migrant workers in Guangdong Province stopped participating in endowment insurance programs last year, because they could not receive pensions after they move back to their hometowns to retire.

Zhao said she also worries about this problem.

The draft law also provides for a standard social security number system across the country, which uses each citizen's current national identification card number. The social security number system will facilitate the transferability of social insurance for people who change jobs in different localities.

According to a Xinhua News Agency report, the State Council has submitted a proposal that the provincial, autonomous regional and municipal governments should be entirely responsible for implementing the transfer of the country's endowment insurance funds by the end of this year, and that the Central Government would oversee the funds up to 2012.

Funds security

The draft law also stipulates that governments at various levels should encourage and support the public's participation in supervising insurance funds. All individuals and organizations will have the right to complain or report illegalities.

The Ministry of Human Resources and Social Security and relevant local authorities currently manage the country's social insurance fund. The draft law calls for the government to set up social insurance supervisory committees composed of representatives from employers, employees, trade unions, legal experts and actuaries. The committees will acquire and analyze data on the collection, payment, management and investment operations of the social insurance funds and offer suggestions and advice on the social insurance work in an effort to prevent fraud. Since 1998 there have been a series of social insurance fund embezzlement scandals involving more than 16 billion yuan ($2.34 billion), according to Xinhua News Agency.