Foreigners working in China must participate in the social insurance scheme, which includes basic pension insurance for employees. Foreign employees therefore raised some questions, such as why they need to contribute to pension insurance, what is the legal age to receive a pension in China, and how they can apply for pension refunds when they leave the country.
This article explores three ways foreigners can manage their individual social insurance accounts when leaving China, as well as how foreigners in Shanghai can apply for pension insurance reimbursement.
Retention, Termination and Succession of Individual Social Insurance Accounts
The Provisional Measures for Social Insurance Participation of Foreigners Employed in China (Provisional Measures) issued by the Ministry of HR and Social Security in 2011 specify how foreigners covered by the Chinese social insurance scheme are entitled to benefits. pension insurance.
According to the Social Insurance Law and Provisional Measures,foreigners who contribute to the Chinese social insurance system and meet the legal conditions for receiving pensions are eligible for pension insurance benefits in accordance with the law.
The interim measures also state that foreigners who leave China before reaching the legal age to receive pensions must keep their individual social insurance accounts. If they return to work in China again, the number of years of contribution will be calculated on a cumulative basis.
For foreigners who terminate their contribution to the social insurance scheme by a written request, the balance of their individual pension insurance accounts can be reimbursed in a lump sum. In the event of the death of a foreigner, the balance of his individual social insurance accounts may be returned to him in accordance with the law.
In short, there are three ways for foreigners to manage their individual social insurance accounts when leaving China: namely retention, termination and succession.
How can foreigners in Shanghai apply for pension insurance reimbursement?
the ‘Circular of the Shanghai Municipal Human Resources and Social Insurance Bureau on Issues of Foreigners, Overseas Permanent Residence Holders (Long Term) and Working Residents of Taiwan, Hong Kong and Macao in Shanghai to participate in the urban social insurance Scheme’ (also known as Document No. 2009-38) expired on August 15, 2021 (please refer to the article Should Foreigners in Shanghai Pay Social Insurance Contributions for more information).
As a result, foreigners working in Shanghai must now participate in the Chinese social insurance scheme. This includes basic pension insurance for employees, basic medical insurance for employees, work injury insurance, unemployment insurance and maternity insurance.
Here we provide foreign employees in Shanghai with an overview of how to terminate their individual social insurance accounts when leaving Chinaas well as the list of procedures for how to request a one-time refund of the balance of pensions from individual social insurance accounts. What is notable is that the funds remaining after the liquidation of individual health insurance accounts also fall within the scope of a reimbursement from social security.
In accordance with the provisions of Shanghai Municipality, foreign citizens, staff with permanent (long-term) residence from other countries, and residents of Taiwan, Hong Kong and Macau working in Shanghai (under 60 for male and under 55 for women) who terminate or end their employment relationship with employers in Shanghai and leave China may request the termination of the basic pension insurance from the 5th to the 26th of each month (excluding public holidays) with the social insurance management body of the corresponding districts.
Candidates can be the foreign employee himself, the employer or an authorized third party. When the administrative social insurance body receives the request for the termination of a pension insurance account, it informs the applicant in writing of his rights to keep his individual social insurance account and of the consequences of the termination of a pension insurance account.
After receiving written confirmation from the foreign employee, the social insurance administrative body will officially close the pension insurance account.
The social insurance management body will return the remaining fund (excluding the amount and interest converted from the employee’s years of service which were recorded before 1992) to the employee’s pension insurance account. applicant in one payment after 30 calendar days.
Yes foreign employees apply for the termination of the pension insurance account in person, they must prepare the following documents:
- Relevant supporting documents for the dissolution or termination of the employment (employment) relationship with employers
- A declaration form signed by the applicant for the termination of the pension insurance account (this is exclusive for foreigners from other countries and residents of Hong Kong, Macao and Taiwan)
- Personal bank details authorized in the national real name: original and copy of the bank card
- Their original passport
- The translated version of their passport with the stamp of the translation company
- The employee’s health insurance card (if the applicant has never applied for the card, he must submit a written statement)
If employers request the termination of a social insurance account on behalf of their foreign employeesthey must provide the company’s bank details to receive the funds.
If a authorized third party requests the termination of the social insurance account on behalf of foreign employeesthe authorized person must provide their original identity card and an authorized letter from the foreign employee.
After completing the above procedures, applicants should go to the municipal medical insurance agency to request cancellation of the individual medical insurance account. The district and county medical insurance office will liquidate the balance of the individual medical insurance account in accordance with regulations. After liquidation, the remaining funds would be returned to the claimant in cash.
The following documents are required to cancel individual medical insurance accounts:
- Pension Insurance Termination Approval Form
- The original passport
- The original of the health insurance card (for those who have never applied for a health insurance card, they can request it on the spot for subsequent liquidation procedures)
- Bank details of the employer’s company (only if you choose bank transfer)
- The original identity card of the authorized person
The method of receiving the remaining funds from the health insurance account is different from that of the pension insurance account. Funds remaining in the medical insurance account cannot be paid directly into an overseas employee’s personal bank accountwhether their bank account is issued by banks in China or not. It can only be collected in cash or transferred to the employer’s corporate account.
The method of cash collection depends on the amount of funds remaining. If the amount is less than CNY 10,000, applicants can withdraw cash immediately on the spot after accepting the required documents. If the amount is more than CNY 10,000, after the required documents are accepted by the counter of the medical insurance center, applicants should make an appointment for collection at a scheduled time.
If applicants choose to transfer remaining funds to the employer’s company bank account, they will be required to complete a registration form. After seven business days, the remaining funds will be released to the employer’s corporate bank account, and the employer withdraws the money and transfers it to the applicant.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.