China's top legislature on Sunday began reading the draft law on
social security with an emphasis on strict supervision over the
social security fund.
The draft law was submitted to the weeklong 31st session of the
Standing Committee of the National People's Congress (NPC), China's
top legislature, for first reading.
It states the social security fund is composed of five
categories: pension insurance, medical insurance, work injury
insurance, unemployment insurance and maternity insurance.
It stipulates all funds should be used for specified purposes
only, and no institutions or persons had the right to occupy or
embezzle from the fund.
To make management of the fund more transparent, the draft law
asks institutions in charge of social security cases to disclose
revenue, expenditure, balance and earnings on a regular basis.
"Only after the safety of the social security fund can be
guaranteed, can the fund be used for investment operation to
maintain and increase the fund value," the draft bill says.
In June, Shanghai courts started hearing cases against officials
involved in the social security fund scandal that involved 3.7
billion yuan (US$502.3 million). Investigators found the money had
been illegally loaned by a company of the municipal labor and
social security bureau to Shanghai Feidian Investment Development
Co. Ltd. The company was controlled by tycoon Zhang Rongkun, ranked
16th on the Forbes China rich list in 2005, who was
arrested during the investigation into the misuse of pension
funds.
The draft law says all governments above the county level should
establish supervision systems to safeguard the secure and efficient
operation of the fund.
Any embezzlement activities would be punished or investigated
under the law, the draft says.
It also states finance departments and audit offices should
administrate the security fund at corresponding levels according to
their responsibility.
Company representatives, trade unions together with law experts
and actuaries could also organize a supervision committee to
supervise revenues, expenditures, the investment operation of the
social security fund and put forward their proposals.
If the security fund was embezzled, the social security
administration departments, financial departments and audit offices
should recover the embezzled fund. Illegal income earned from
embezzled social security funds should be confiscated and personnel
involved would be punished according to the law.
(Xinhua News Agency December 23, 2007)