SHENZHEN¡¯S pension fund policy will remain unchanged for the time being despite an imminent change in the rate of contributions for other parts of China, officials said.

The Minister of Labor and Social Security has announced that, from Jan. 1, 2006, the contribution rate of individual pension accounts will be cut down from 11 percent to 8 percent of an employee¡¯s salary.

Shenzhen¡¯s pension fund scheme is governed by a local regulation, and therefore the national policy will not affect the Shenzhen scheme, Du Bin, vice director of the city¡¯s Social Security Center, said Tuesday.

However, Du did not rule out any change in the future. Any amendment to the pension fund regulation will encourage more people to join the ¡°safety net¡± and ensure the personal accounts have adequate deposits, Du said.

He also assured worried residents that even though the contribution rate will be reduced outside Shenzhen, the monthly pension amount will remain almost unchanged, because the rate based on which basic pension will be paid will also be raised at the same time.

A large number of migrant workers in Shenzhen have withdrawn from the scheme in recent months following rumors of an unfavorable policy change. Du warned that those who quit the scheme would only get the personal accounts back, losing earlier contributions to the communal account.

Du reiterated that 11 percent of a participant¡¯s salary would be paid to the individual pension account next year.

According to China¡¯s present pension system, government, enterprises and workers all pay a fixed percentage into a government-managed social security fund.

Yet, many retirees and workers who began work before the scheme was adopted in the 1990s have to depend on the State to contribute retroactively to their pension accounts. Such problems have been a reason for the shortfall in the fund.

As a result, many provinces have transferred money from individual accounts to pay pensions, causing a huge shortfall in funds that requires immediate corrective action.

After the change becomes effective Jan. 1, an employer¡¯s contribution of 3 percent of the monthly salary will be paid to the communal account rather than the individual account, as it used to be earlier. This will ensure that the individual account will be left untouched until it is paid to the retiree.

In Shenzhen, an employee with registered permanent residence pays 5 percent of his monthly salary to the scheme, while his employer pays 9 percent. Three percent goes to the communal account and 11 percent to the individual account.

Editor: Yan