Latest News:  
Beijing   Overcast/Light rain    28 / 22 ℃  City Forecast

English>>China Business

The Pain of a Pension Deficit (3)

(Beijing Review)

08:53, August 24, 2012

What deficit?

China currently operates a multiple-track pension system. Pensions of people working for government agencies and public institutions are granted by government funds; employees of urban enterprises are subject to the pension fund system composed of individual accounts and social collected funds; and farmers participate in the new-type social endowment insurance system that was established in 2009. The basic social pension for farmers set by the Central Government is 55 yuan ($8.66) per person per month, and local governments can increase the standard in accordance with local conditions.

At present, the deficit is in the pension fund system for urban employees set up in 1996. At that time, China was deep into the market-oriented reform of state-owned enterprises, allowing for a market-oriented endowment insurance system to be adopted.

At that time, there were more than 30 million retirees from enterprises. Before the establishment of the endowment insurance system, enterprise employees did not need to pay for their endowment insurance. Therefore in the pension fund system, there are no individual accounts for these retirees, and their pensions all come from social collected funds. However, social collected funds are not enough to distribute pensions, so many local governments have to divert funds from individual accounts.

China tried to solve its pension problem by diverting funds from individual accounts, but to little effect. At the end of 2011, only 300 billion yuan in the individual accounts were payable, a shortfall of 2.2 trillion yuan ($349.2 billion) compared with 2.5 trillion yuan ($396.8 billion) paid by employees to their individual accounts. The shortfall hasn't been made up for. Instead, it has been expanding. According to CASS figures, from 2008 to 2010, the shortfall expanded from 1.4 trillion yuan ($220.47 billion) to 1.7 trillion yuan ($267.72 billion), and from 2010 to 2011, the shortfall rose by 500 billion yuan ($78.74 billion).

【1】 【2】 【3】 【4】 【5】 【6】 【7】



News we recommend:
Right move in VAT direction Survey shows SOE jobs are top choice CNOOC pushes ahead with Nexen acquisition
Consumers turn toward imported food Staying on Target More new grads opt for State firms
Treading Lightly for Fast Growth  Online retailers declare cut-throat price war Central bank makes record cash injection

Email|Print|Comments(Editor:李倩、厉振羽)

Related Reading

Leave your comment0 comments

  1. Name

  

Selections for you


  1. An armored unit in training

  2. Ishigaki, an island's rise from China-Japan spat

  3. More new grads opt for State firms

  4. Beautiful sunset glow over Nanjing sky

  5. 24 Of The Hottest Body Paint

  6. How to marry a billionaire

Most Popular

Opinions

  1. Visits highlight Cairo foreign policy change
  2. New Silk Road has potential for global significance
  3. Egypt to pursue a more active diplomatic approach
  4. Commentary: Moderate growth rate
  5. The not so curious case of single women
  6. Editorial: Solution to trade war
  7. 'Made in SE Asia' doesn't doom China
  8. Once warm Sino-Soviet relationship can be revived
  9. Editorial:Corporate competitiveness
  10. WTO membership win-win step for Russia, world

What's happening in China

Mengniu manager accused of fraudulent labeling

  1. Desperate bid to save Yangtze river pig
  2. Panda Bao Bao dies in Berlin Zoo at 34
  3. 20 stand trial in China in "gutter oil" case
  4. Lawyers want to track transport card deposits
  5. Two typhoons to hit coastal areas

China Features

  1. Hometown of "The Cowherd and the Weaving Girl"
  2. Japan arrests Chinese over Diaoyu Islands issue
  3. Opportunities lie ahead for emerging countries
  4. Mercedes-Benz E-class owners to file lawsuit
  5. 'Uncle Hanzi' and his 'Hanzi Life'

PD Online Data

  1. Spring Festival
  2. Chinese ethnic odyssey
  3. Yangge in Shaanxi
  4. Gaoqiao in Northern China
  5. The drum dance in Ansai