According to China Daily, Li Jianguo, vice-chairman of the Standing Committee of the National People’s Congress (NPC), said China’s pension system has yet to expand its narrow coverage, deal with urban-rural and regional imbalances, and increase the level of pension payments, which is now 55 yuan ($8.61) a person a month. Social security funds have registered deficits in some regions, because the number of retirees exceeds the number of laborers, Li said in a review report on the implementation of the law on the protection of senior citizens’ rights.
Li called for careful management of the national pension funds to reduce the risks and increase value.
China Daily reports according to census data from 2010, there are 177.6 million people older than 60 in China, making up 13.26% of the total population, and the number is estimated to exceed 200 million in 2014. A declining birth rate will add to the pressure. Five laborers had to support one pensioner in 2010. In 2020, three laborers will have to do the job.
The news report said China launched a new rural pension system on a trial basis in August 2009. It has attracted 190 million rural villagers, benefiting 51.7 million people older than 60. It will cover 60% of townships nationwide by the end of this year, up from 24% in 2010.
The pension plan for urban residents, which began a trial phase on July 1, aims to cover 60% of the urban population by the end of this year and will ensure pension payments to the unemployed when they reach the age of 60, so long as they have paid into pension accounts for at least 15 years.Yan Yixin, another lawmaker of the NPC Standing Committee, stressed value-adding financial operation of the 1.3 trillion yuan of pension funds should be raised to a national strategic level, because it consists of the bulk of China’s 2 trillion yuan of social security funds, but is currently run with a slim 2% rate of return.
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