China to establish central adjustment system for pension funds
Senior citizens chat at a retirement home in Beijing. [Photo: Xinhua]
China has made plans to establish a central adjustment system for basic pension funds of enterprise employees to balance payment burdens of local governments.
CRI's Victor Ning has more.
Based on China's current pension system, a central adjustment fund will be set up to regulate pension funds in various provincial regions.
The move is designed to help guarantee timely and complete payments to retirees.
The new policy comes as the imbalance in pension funds among different provincial areas has become increasingly obvious over recent years.
You Jun, China's Vice Minister of Human Resources and Social Security, explains.
"The surplus of pension funds occurs mostly in eastern parts of China, like Beijing and Guangdong, with seven of the provincial regions accounting for two thirds of the total accumulative surplus. Meanwhile, some of the provinces, like Liaoning and Heilongjiang, have been met with great pressure in running their pension funds, as the incomes could not satisfy their expenses. The imbalances of the pension funds at the provincial level are difficult to be addressed within the provinces, thus an adjustment across the whole nation is needed."
Effective beginning July 1st, the adjustment fund draws a certain portion from the provincial capital pool, which will enable the central government to redistribute it later.
It will be the first step towards nationwide coordination, which will help to facilitate a sustainable basic pension scheme.
You Jun is also stressing that the new policy will not create burdens for enterprises or employees, nor will it have any negative impact on the welfares of retirees.
"The central adjustment fund is comprised of the pension funds turned over by each of the provincial regions. The pension payment by the enterprises and individuals will be conducted according to previous policies, and no extra fees need to be paid. Establishing the central adjustment fund is mainly aimed at adjusting the deficits and surpluses of the provincial pension funds. The total amount of the national pension fund will not change, nor will it add burdens to the society. The deposit ratio for the pension fund will also remain the same."
China has been striving to build a fair and inclusive social security network, with its basic pension insurance covering 915 million residents at the end of last year.
Chinese Premier Li Keqiang said earlier this week that coordinated efforts should be made to ensure the raising, allocation, and management of funds under the central adjustment system.
Local authorities were advised to ensure that basic pension payments are made in time and in full, via means including transferring some state assets to the country's social security funds.
For CRI, this is Victor Ning.