China’s rapidly greying population leaves provincial pension pots seriously short of cash
Ratio of workers to retirees fell to 2.8-to-one in 2016, with 13 regions now struggling to meet monthly contributions, official report says
China’s provincial pension funds are rapidly running out of money, with the coffers in 13 jurisdictions down to less than a year’s worth of payments, local media reported on Sunday.
Among the worst affected is the northeastern province of Heilongjiang, where the local government has already begun dipping into its fiscal revenue to fund monthly pension payments, The Beijing News reported, citing an annual survey released recently by the Ministry of Human Resources and Social Security.
China’s greying society and uneven economic development have put enormous pressure on the nation’s social security scheme. Overall contributions to the national pension fund rose by 19.5 per cent, or 571 billion yuan (US$86.19 billion) last year, but payments grew by 23.4 per cent, or 604 billion yuan, according to the report.
It was the fifth consecutive year that the growth in spending had outpaced the expansion of funds.
While provinces are responsible for managing their own funds, the vast differences in prosperity levels from one region to the next means the system is unbalanced.