Elderly citizens could soon receive increased incomes under the scheme
China is studying plans to introduce reverse mortgages to help elderly citizens increase their incomes as the country grapples with a growing deficit in its pension fund that has resulted in a failure to pay retired workers properly.
China National Real Estate Development Group Corp said a special committee - comprising the firm controlled by the State Council, the China Insurance Regulatory Commission and the construction ministry - had been established to look at the feasibility of introducing the scheme.
The committee will report to the State Council, development group chairman Meng Xiaosu told the South China Morning Post.
Mr Meng said the scheme, a type of home equity loan that allows the owner of a property to convert equity of the property into cash while retaining the ownership rights, could be introduced as early as next year once approved by the central government.
If implemented, reverse mortgages would provide a much-needed reprieve for Beijing, which has been under pressure to pay pension money to retired workers as decades of embezzlement and mismanagement of social security funds have resulted in a substantial portion of the funds being lost.
More than 40.7 million workers retired last year, a 29 per cent rise from 2001, according to official statistics.
