China said it will raise the state pension payment for retirees by 10 percent and enable hundreds of millions of migrant workers to transfer their retirement benefits when they move across provinces.
The State Council, or cabinet, announced the changes on its website after a meeting chaired by Premier Wen Jiabao on Tuesday.
China has been trying to improve its social security system to encourage people to spend more money rather than save for their retirement and future medical expenses.
State pension payments for retirees will be increased by an average of 120 yuan (18 dollars) per month from the start of 2010, the statement said.
Rural and urban workers also will be allowed to transfer their pension accounts when they find new jobs or move to other provinces, it said.
Workers previously could only transfer their own pension contribution, not the part paid by their employer.
Only a fraction of the country's 1.3 billion people are covered by social security.
At the end of last year, 219 million people received a pension and about 317 million had basic medical insurance, the official Xinhua news agency said.
About 124 million had unemployment insurance and 138 million had work injury insurance, Xinhua said.