Regulations of Tianjin Municipality on Old-Age Insurance for Workers and Staff of Urban Enterprises

Adopted at the 21st Session of the Standing Committee of the 12th Tianjin Municipal People’s Congress on 10 January 1996

Amended at the 36th Session of the Standing Committee of the 12th Tianjin Municipal People’s Congress on 22 October 1997 in accordance with the Decision on Amending the Regulations of Tianjin Municipality on Old-Age Insurance for Workers and Staff of Urban Enterprises;

Amended for the second time at the 32ndSession of the Standing Committee of the 14th Tianjin Municipal People’s Congress on 7 November 2006 in accordance with the Decision on Amending the Regulations of Tianjin Municipality on Old-Age Insurance for Workers and Staff of Urban Enterprises

Chapter I General Provisions

Article 1 These Regulations are enacted in accordance with the Labour Law of the People’s Republic of China and other pertinent laws and regulations and in the light of the actual conditions of this Municipality with the aim of guaranteeing the basic living standards of workers and staff of urban enterprises after retirement.

Article 2 These Regulations apply to the following employing units and their workers and staff in the areas under the jurisdiction of this Municipality:

(1) State-owned enterprises and their workers and staff;

(2) Collective-owned urban enterprises and their workers and staff;

(3) Town and township enterprises and their workers and staff located in cities and towns;

(4) Stock sharing enterprises and joint operated enterprises and their workers and staff.

(5) Private enterprises and private industrial and commercial households and their workers and staff located in cities and towns;

(6) Foreign-funded enterprises and enterprises invested by businessmen from Hong Kong, Macao and Taiwan and their workers and staff employed from the mainland of China;

(7) Representative offices of foreign enterprises, and of Hong Kong, Macao and Taiwan enterprises and their Chinese workers and staff; and

(8) Other employing units and their workers and staff where laws and regulations require that an old-age insurance programme be installed.

Article 3 The old-age insurance programme for workers and staff consists of the basic old-age insurance scheme, enterprise annuities and old-age insurance attached to personal savings deposits.

The basic old-age insurance scheme is obligatory, which all the employing units and their workers and staff must subscribe.

It is advocated that employing units set up enterprise annuities for their workers and staff according to their economic capabilities. The workers and staff are encouraged to participate in old-age insurance attached to personal savings deposits on their own wishes. The employing unit and its workers and staff are free to choose the agency for enterprise annuities and old-age insurance attached to personal savings deposits.

Article 4 A basic old-age insurance fund shall be installed. The old-age insurance premiums paid by the employing unit and its workers and staff shall become part of the basic old-age insurance fund. The basic old-age insurance fund shall be collected and used in a uniform way on the principle of raising enough fund to pay the pensions and retain a certain portion of the accumulated fund.

The basic old-age insurance fund shall be guaranteed to be exclusively used for the old-age insurance programme of the workers and staff. No units or individuals may take it or use it for other purposes.

Article 5 The basic old-age insurance premiums shall be borne jointly by the employing unit and its workers and staff by way of integrating the publicly raised fund with individual accounts.

Article 6 The treatment workers and staff are entitled to by the old-age insurance programme shall be in compliance with the economic development of this Municipality and in accordance with the amount of fund paid by the employing units and their workers and staff.

Article 7 The Municipal administrative department for labour and security is in charge of the old-age insurance programme for workers and staff of urban enterprises in this Municipality.

Chapter II Raising of Basic Old-age Insurance Fund

Article 8 The basic old-age insurance fund shall be paid in accordance with the following standard:

(1) The employing unit shall pay 20% of the accumulated fund of the base quota paid by the workers and staff individually, and the bank where the enterprise has opened an account shall deduct the money by proxy on a monthly basis.

(2) Workers and staff shall pay 8% of their salaries and the employing unit shall deduct the money by proxy from their salaries on a monthly basis.

(3) Where salaries of the workers and staff are less than 60% of the preceding year’s average monthly salaries of the workers and staff of this Municipality, the base for the employing unit and its workers and staff to pay their basic old-age insurance premiums shall be 60% of the preceding year’s average monthly salaries of the workers and staff.

(4) Where salaries of the workers and staff are 300% higher than the preceding year’s average monthly salaries of the workers and staff of this Municipality, the base for the employing unit and its workers and staff to pay their basic old-age insurance premiums shall be 300% of the preceding year’s average monthly salaries of the workers and staff. The part exceeding 300% shall neither be counted into the base for basic old-age insurance premiums nor serve as a base for issuing pensions.

(5) The private industrial and commercial household shall pay the basic old-age insurance premiums at the rate of 20% of the preceding year’s average salaries of the on-the-post workers and staff of this Municipality, of which 8% shall enter the individual account of the said household. The private industrial and commercial household shall pay for the workers and staff it employs the basic old-age insurance premiums at the rate of 12% of the preceding year’s average salaries of the on-the- post workers and staff of this Municipality, and the workers and staff shall pay their basic old-age insurance premiums at the rate of 8% of the preceding year’s average salaries of the on-the-post workers and staff of this Municipality. All the payment made by the workers and staff themselves shall enter the individual accounts of the said workers and staff.

Article 9 The Municipal People’s Government may, in the light of the actual situation, readjust the rate of payment of the basic old-age insurance premiums and shall file the adjustment to the Standing Committee of the Municipal People’s Congress for the record.

Article 10 The agent managing the basic old-age insurance fund shall deposit the basic old-age insurance fund at the bank as a special account for the basic old-age insurance fund which generates an interest at the rate of the current interest rate for savings set by the People’s Bank of China. The interest shall be deposited as part of the basic old-age insurance fund.

The maintenance and increment of value of the basic old-age insurance fund shall be regulated by related stipulations and all the benefits thus gained shall go into the basic old-age insurance fund.

No taxes or fees shall be imposed on the basic old-age insurance fund or on the benefits it generates.

Article 11 Where the basic old-age insurance fund is short of the demand, the Municipal finance shall render support depending on the situation.

Article 12 The employing unit shall, within 30 days from the date of registration at the administration for industry and commerce, register with the administrative agency for the basic old-age insurance fund and start paying the basic old-age insurance premiums required by the regulations. Where the employing unit terminates or changes matters relating to the old-age insurance it shall, within 30 days from the date of termination or change, undergo the formalities of termination or change at the administrative agency for the basic old-age insurance fund that had handled the registration.

Where the employing unit enters into or terminates the labour relations it shall register for the addition or deduction of the number of workers and staff at the administrative agency for the basic old-age insurance fund.

Article 13 Where an enterprise disbands, goes bankrupt or terminates its business due to other reasons, it shall, in the liquidation procedure, firstly pay the salaries and pensions in arrears and then pay the basic old-age insurance premiums in accordance with pertinent regulations. Where it is required to reserve money to pay the old-age insurance premiums for the retirees in the future, this shall be done according to the pertinent State regulations.

Chapter III Personal Accounts for the Basic Old-age Insurance

Article 14 The old-age insurance agency shall, on the principle of integrating social pooling with personal accounts, open a personal account for every employee covered by the basic old-age insurance programme in accordance with the social security number (GB 11643-89) published by the State Technological Supervision Bureau.

Article 15 Personal accounts for the basic old-age insurance scheme include:

(1) The totality of the money paid by the employee;

(2) Benefits produced by investing the personal accounts fund; and

(3) Interests generated by personal accounts.

Article 16 The interest on the personal accounts for the basic old-age insurance scheme shall be calculated based on the interest rate of the same period on savings by urban and rural residents on a year on year basis.

Article 17 Where an employee or retiree dies, the savings in the personal accounts of the deceased shall be handed over to the designated beneficiary or the legitimate heir.

Article 18 An employee that transfers to other units within this Municipality shall not change his personal account for the basic old-age insurance scheme. Where an employee suspends paying the basic old-age insurance premiums due to discontinuing work or unemployment for various reasons his personal account for the basic old-age insurance scheme shall be kept and interest shall continue to generate on the savings.

Where an employee transfers to other provinces, autonomous regions or municipalities, his personal account shall be handled in accordance with pertinent State and Municipal regulations

Chapter IV Benefits from the Basic Old-age Insurance Scheme

Article 19 Employees that reach the retiring age and undergo the formalities of retirement are entitled to the benefits from the old-age insurance prgramme in accordance with the stipulations of these Regulations.

Article 20 Where the employing unit and its workers and staff have paid the basic old-age insurance premiums for 15 years in a row, the employee shall get his basic pension starting from the following month when he undergoes the formalities of retirement in accordance with these Regulations until he dies.

Where an employee started working before the system of personal accounts for the old-age insurance programme was launched, his working years shall be regarded as years of paying the old-age insurance premiums subject to examination and approval by the labour and security department.

Article 21 Where the workers and staff start working after 1 January 1998, their basic pension after retirement shall consist of primary pension and pension from personal accounts for the basic old-age insurance programme and shall be issued on a monthly basis according to the following standards:

(1) The basic pension shall be calculated on the base of the preceding year’s average monthly salary of the on-the-post workers and staff of this Municipality and the individual index-linked average monthly payment of the basic old-age insurance premiums and shall be issued depending on the number of years of premium payment, one percentage point for each year payment of the insurance premiums.

(2) The pension based on the personal accounts for the basic old-age insurance scheme shall be calculated by the formula of the remainder of the savings in the personal accounts for the basic old-age insurance scheme divided by the number of months of payment. The number of months of payment shall be determined by the average life expectancy of the urban population at the time of retirement, retiring age and interest rate.

Persons that started working before 31 December 1997 and retire after 1 January 2006 shall, in addition to the basic pension and the pension from the personal accounts for the basic old-age insurance scheme, be given a transient pension. The transient pension shall be paid by the old-age insurance fund.

Persons that retired before 31 December 2005 shall receive pensions in accordance with the former State regulations.

Article 22 From the date when these Regulations go into effect, the employing unit and its workers and staff that pay less than 15 years’ basic old-age insurance premiums shall not be entitled to the basic pension and the remainder of the savings in the personal accounts for the old-age insurance programme shall be given to the owner of the account in a lump sum.

Article 23 An adjustment mechanism for the basic pension shall be installed. The Municipal People’s Government may adjust annually the basic pension in proportion to the growth of the workers’ and staff’s salary of the preceding year.

Article 24 Workers and staff that retired before the installment of these Regulations shall, in addition to the retirement benefits, readjust their pension annually in accordance with Article 23 of these Regulations.

Article 25 Retirees shall continue to enjoy the benefits in addition to pensions according to pertinent regulations.

Article 26 Where an employee goes unemployed or suspends a job, the payment by the employing unit and by the individual for the basic old-age insurance premiums shall not be returned. Where the employee and his new employing unit resume the payment of the basic old-age insurance premiums, the years of payment before and after his reemployment shall be accumulated; where he fails to be reemployed, he shall be entitled to the basic old-age insurance benefits in accordance with the number of years he paid the premiums.

Chapter V Management and Supervision of the Old-age Insurance Fund

Article 27 The Municipal labour and security administration performs the following duties and responsibilities regarding the old-age insurance programme for the workers and staff of urban enterprises:

(1) Mapping out a development plan for the old-age insurance undertaking for enterprises’ workers and staff;

(2) Organizing the implementation of laws, rules and regulations regarding the old-age insurance programme and supervising and checking up the implementation;

(3) Setting up, in collaboration with relevant departments, a financing, accounting, statistical and inner auditing mechanism for the old-age insurance fund;

(4) Reporting on a regular basis to the Municipal People’s Government on the old-age insurance work for enterprises’ workers and staff and the operation of the old-age insurance fund;

(5) Maintaining supervision over the business of the managing agency for the old-age insurance fund; and

(6) Other duty-bound responsibilities.

Article 28 The managing agency for the old-age insurance fund shall take charge of the following concrete work concerning the operation of the basic old-age insurance fund for enterprises’ workers and staff:

(1) Taking charge of raising, managing, paying the fund, and maintaining and increasing its value;

(2) Working out on a regular basis the budget and final accounts for the basic old-age insurance fund;

(3) Checking the reports and accounts concerning the old-age insurance fund raised by the employing unit and individuals;

(4) Responding to inquiries by the employing unit, its employees and retirees on the old-age insurance fund and rendering good services; and

(5) Other matters that should be handled concerning the old-age insurance.

Article 29 The old-age insurance fund shall be placed under a double auditing mechanism. The Municipal managing agency for the old-age insurance fund shall conduct inner auditing over the managing agencies under its leadership and the Municipal auditing department shall conduct auditing over the budget and final accounts of the managing agency for the old-age insurance fund

Article 30 A supervising organ shall be established jointly by the representatives from the government, enterprises, trade unions and retirees to supervise the implementation of laws, rules and regulations concerning the old-age insurance programme and management of the insurance fund.

Article 31 The employing unit and its workers and staff and the retirees have the right to accuse the managing agency and functionaries of the old-age insurance fund of their irregularities.

The trade union of the employing unit has the right to supervise the report on, and payment and disbursement of benefits concerning the old-age insurance fund of the said unit.

Chapter VI Legal Responsibilities

Article 32 Where governmental departments or managing agencies for the old-age insurance fund, in violation of these Regulations, commit any of the following acts, the department of the next higher level shall order them to make corrections. Where the case is serious, the person in charge or the person directly held responsible shall be penalized by administrative sanctions. Where the case is serious enough to constitute a crime, he shall be investigated for criminal responsibilities according to the law:

(1) Refusing to go through the formalities of the old-age insurance programme for the employing unit and its workers and staff;

(2) Changing without authorization the base or proportion of payment on the part of the employing unit and its worker and staff;

(3) Delaying or not paying out the basic old-age pension in accordance with pertinent regulations;

(4) Not putting the old-age insurance fund and the interest and benefits generated therefrom into the special account for the old-age insurance fund;

(5) Using the old-age insurance fund for other purposes;

(6) Investing the old-age insurance fund in violation of the regulations thereof;

(7) Levying service fees on the old-age insurance fund management in violation of the regulations; and

(8) Other acts violating pertinent laws, rules and regulations.

Article 33 Where an employing unit fails to pay the old-age insurance premiums without due reasons, the labour and security department shall order it to pay within a definite period of time. Where the unit still refuses to pay when the valid period of time expires, the department shall ask it to pay an additional overdue fine of 2‰ of the required payment per day

Where an employing unit, in violation of these Regulations, deducts or delays the payment of the basic old-age insurance benefits the labour and security administrative department shall order it to pay within a definite period of time and pay an additional one to five times the deducted or delayed sum.

Article 34 Where an employing unit uses the basic old-age fund for other purposes, the labour and security administrative department shall impose on it a fine of less than two times the appropriated money; the unit or the competent department of the next higher level shall serve the person in direct charge an administrative sanction; where the offence is serious enough to constitute a crime, the department concerned shall investigate him for criminal responsibilities according to the law. Article 35 Where anyone obtains benefits of the basic old-age insurance programme by illegal means the managing agency for the old-age insurance fund shall retrieve all the illegal gains and the labour and security department shall penalize him with a fine of up to 2 times the illegal gains. Where his offence constitutes a crime he shall be investigated for criminal responsibilities according to the law.

Article 36 A party that refuses to accept the administrative sanction decision may, within 15 days as from the date of receipt of the penalty decision, apply for a review of the case at the administrative organ of the next higher level of the organ that has made the decision. Where he refuses to accept the review decision he may bring a lawsuit to the people’s court. He may also bring a lawsuit directly to the people’s court within 15 days as from the date of receipt of the penalty decision. Where a party neither applies for a review, nor prosecutes, nor carries out the penalty decision at the expiration of the time limit, the organ that made the penalty decision shall apply to the people’s court for forced execution.

Article 37 Whoever obstructs the functionaries of the labour and security department or the managing agency for the old-age insurance programme from performing their duties according to the law and violates the regulations on administration of public order and security shall be penalized by the public security department. Where the offence constitutes a crime he shall be investigated for criminal responsibilities according to the law.

Article 38 Where disputes arise over the old-age insurance programme one may apply for arbitration or bring a lawsuit to the people’s court in accordance with the law.

Chapter VII Supplementary Provisions

Article 39 The term ‘workers and staff’ in these Regulations refers to the employee that legally enters into labour relationship with an employing unit and has earned more than one month salary.

Article 40 Flexibly employed persons that are covered by the old-age insurance programme shall follow the provision of these Regulations concerning private industrial and commercial households.

Article 41 The Municipal People’s Government may, in accordance with the pertinent regulations of the State Council, readjust the base and proportion of payment for the old-age insurance premiums and the method of issuance of pension and submit them to the Standing Committee of the Municipal People’s Congress for the record.

Article 42 These Regulations shall go into effect as from the date of promulgation.