onsdag 19. juni 2019

Cracks in China’s old-age pension system begin to widen

An impressive total of 943 million people in China had some form of state-backed old-age pension coverage by the end of 2018, an increase of more than 27 million over the previous year, according to the Ministry of Human Relations and Social Security (MOHRSS).

A closer look at the MOHRSS figures however shows that most people are only covered by the government’s urban and rural residents pension scheme, which currently offers only a minimal pay-out. Moreover, the main urban workers’ basic pension scheme is under growing financial pressure and could be completely depleted by as early as 2035 unless radical reforms are introduced.

A research report published by the Chinese Academy of Social Sciences (CASS) predicts that total expenditure from the urban workers’ basic pension fund will begin to exceed contributions in 2028 and that reserves will decline exponentially after that.