Thousands of retired people in the southwest city of Chongqing are receiving no pension, and the total of arrears is rising because the number of active workers is too low and many companies avoid their obligations. The Workers Daily carried a front-page story from Chongqing, the biggest industrial city in the southwest, detailing the worsening plight of workers in state factories. As of the end of June, pension arrears in the city reached 2.3 billion yuan (HK$2.16 billion), equal to 78 per cent of the total disbursed last year, with 8,539 companies, or 61 per cent of the total, in arrears. In the first six months of this year, arrears of 202 million yuan were paid, while there were new arrears of 341 million yuan. To meet the payments, the proportion of active to retired workers should be more than three to one, but it is 2.3 to one, meaning that too little money is coming into the system. As a result, the city government was forced to make a loan of 285 million yuan in the first half of this year to help meet the payments. The newspaper did not give a figure for the number of pensioners affected. The shortage of money is also due to the refusal of companies to meet their legal obligations, because they divert the money to buy cars and apartments, or invest in new production facilities. Some sign agreements to pay the arrears but do not, while others cannot pay because they are in genuine financial difficulty or have gone bankrupt. The wrongdoing is not only restricted to the companies. Fraud among workers is widespread, with fake identity cards, employment records and doctors' certificates. In one textile plant, legitimate retirements from 1997 to the end of June this year were 61, but 372 people reported 'retirement through illness'. In other cases, workers die but their families do not report it. From 1989 to last year, the city's Jinling district lost 274,000 yuan in payments to five dead workers, with one having died in 1967. An investigation by the Shapingbei district found that 30 people had died but their families were still collecting their pensions. Nationwide, according to official figures, pension arrears reached 16 billion yuan at the end of last year. About 123 million people were at that time eligible for a pension, a small proportion of the total workforce. Farmers and those who work in township and village enterprises and private firms do not qualify.