The Social Security Fund (FSS) recently visited Guangdong Province Human Resources and Social Security Department and Zhuhai City Human Resources and Social Security Bureau, in order to exchange views on the implementation situation of the social security systems in the Mainland and Macao, and also to explore the convergence issue of social security for cross-border employees and dwellers in Guangdong and Macao.

A 12-member delegation, consisting of Ip Peng Kin, President of FSS Administrative Committee (the Committee), Chan Pou Wan, Vice-President of the Committee, Lau Veng Seng and Sam Kam San, members of the Committee, Chan Pou I, Head of Contribution Division, Kwong Kwong Hong, Head of Benefits Division, Chan Yee Ling, advisor to the President Office, Lei Ha Mei, functional head of Contribution Division, Hong Kuai Ieng, functional head of Benefits Division, and Leong Wai Ieng, functional head of Central Savings System Group, went to Guangzhou and Zhuhai on 4 and 5 September respectively for a visit to Guangdong Province Human Resources and Social Security Department and Zhuhai City Human Resources and Social Security Bureau.

In the afternoon of 4 September, Lin Wangping and Ge Guoxing, Deputy Directors of the Guangdong Province Human Resources and Social Security Department, and the chiefs of Guangdong Province Social Insurance Fund Administration Bureau, Pension Insurance Division, Rural Social Insurance Division and Unemployment Insurance Division held a meeting with the visiting FSS delegation, where the host introduced the implementation situation of social security policies in Guangdong.  At present, the resident population in Guangdong is over 100 million and all the employees in the Province can participate in the five types of insurance, i.e. basic pension, unemployment, work injury, medical and maternity.  Among them, the number of people insured in pension insurance has reached 39.24 million, which accounts for one-seventh of the nation’s total number of insured, while there are respectively 17.68 million people insured in the rural social insurance that was launched in 2010 and 740,000 people insured in the pension insurance for urban residents that was implemented in early 2012.  Yang Jianhai, Director of the Pension Insurance Division, said that Guangdong has made every effort in recent years to build a multi-level pension insurance system, in which contributions and pension payments can be transferred inter-provincially and intra-provincially.  He added that, on the basis of the basic pension insurance, a voluntary “Enterprise Annuity” system was implemented in 2005, which was a system jointly contributed by both the employer and the employee.  The contribution paid by the employer is 10% to 20% of the employee’s salary, while the employee’s contribution is 8% of his/her taxable income, and the payment period is 30 years.  The current pension level in Guangdong is 1,821 yuan per month.  In order to receive the pension payments, the insured person must comply with the two requirements simultaneously, i.e. having paid up to 15 years of contribution and reached the statutory retirement age.  However, the amount actually received varies according to the paid wages and the contributory period.  Regarding the value appreciation of the social security fund, starting from March this year, the National Council for Social Security Fund was commissioned to manage the fund balance of the basic pension insurance for all urban workers in the Province, changing the former investment approach that primarily used bank deposit as a tool for value appreciation.

In the following morning, the delegation visited the Zhuhai City Human Resources and Social Security Bureau and had a meeting with the Deputy Director Wu Shaoqiang and the chiefs of Pension Insurance Section.  According to the presentation by representatives of the Bureau, the social pension insurance system of Zhuhai is composed of the employee’s basic pension insurance, enterprise annuity and commercial insurance, supplemented with two types of social pension insurance for new rural and urban residents in order to provide old-age protection for farmers and non-working people in towns who have no economic capacity.  The payment standard of the employee’s basic pension insurance is the employer paying 10% of the total wages of the employee, whereas the employees (or individuals) pay 8% of the wages that they earned in the previous month.  Contributions paid by the employers are used to pay the pensions of current retirees, i.e. the younger generation supports the older generation.  The contributions paid by employees (or individuals) are accumulated to pay their own pension in the future.  The delegation also visited the frontline services provided by the social insurance business counters of Zhuhai City.

Ip Peng Kin pointed out that the biggest difference between the social security systems in Guangdong and Macao is that among the various types of insurance in the Mainland, some are borne entirely by the employers while some are shared by employers and employees, and different benefits are supported by specfic contributions, however, the system in Macao is relatively simple.  All the benefits of the system are paid by the employers and employees/individual defined contributions.  Besides, this system depends too much on financial support from the government.  Therefore, a deficit is likely to happen in the future, thus affecting the sustainable development of the system.  In view of this, the FSS is going to make adjustment to the contribution system through social consensus.

Through this visit, both sides also discussed the future strengthening of old-age security cooperation between Guangdong and Macao, hoping to better play their respective advantages in pension insurance matters by creating long-term, stable and mutually beneficial cooperation relationship, and hope to resolve the convergence issue of social security for the cross-border employees and dwellers.