In June 1994, Qingdao was among the first cities to establish an urban social security system. The State Council issued the Regulations on Urban Social Security in 1999, but the implementation process has not been smooth. This is due to the fact that the limited fund are not distributed transparently and fairly in some localities, resulting in complaints and protests. In order to make the regulations work well, Qingdao government has made a series of innovations in its systems, procedures, and methods. It finally established a system consisting of five mechanisms with an emphasis on transparency, openness, and fairness. This is the "Sunshine Aid Project".
The five parts are:
1) A "Four-Tiered Administrative Mechanism" consisting of city, district (county), street (township/town), and neighborhood (village) committees.
2) A "Household Eligibility Evaluation Mechanism" for investigating pensioners' income and living conditions. This is made up of a social security evaluation group from the neighborhood residents' committee, an evaluation committee from street affairs agency, and an approval committee from the district government.
3) A "Procedure Standardization Mechanism" regulating every step of the social security process from application to approval. The whole process includes: application, investigation and evaluation, approval, announcement, and review.
4) A "Classification Mechanism"in which different services are provided depending on pensioners' individual and family conditions.
5) A "Supervision Mechanism" incorporating citizens, social security inspectors, and the media. A supervision hotline has been established. Representatives to the People's Congress and members of the Political Consultative Conference from the district have been hired as supervisors. Announcement boards have been set up at neighborhood committees and in apartment buildings to provide residents with information about pension distribution. In addition to these five mechanisms, Qingdao has also explored temporary aid, housing, health, education aid, and private mutual aid arrangements in order to increase the cohesion of urban social security. Preliminary exploration into integrating urban and rural social security has already begun.
After several years of experimentation, the complete urban social security system was established in 2002 and went into operation. By the end of 2003, a total of 15,348 households, or over 36,000 individuals were receiving social security. This is about 1.5% of the urban population. In the first half of 2003, 868 households or 2,173 persons left social security by re-employment.