Pension fund gaps not an inheritance problem

An elderly man sips tea and sits on a warm afternoon in Shanghai, Feb 2, 2015. [Photo/IC]

A recently released green paper on social security has revealed the official pension fund is expected to support retirees older than 60 for 11.6 years, while the remaining life expectancy of the retirees is 19 years, which means deficiencies in the fund because it pays out more than its income. Comments:

What caused the deficiency? Historically, State-owned enterprises and their employees did not pay into a pension fund but they still received pensions upon retirement. Besides, the percentage of people participating in the pension system is low. Compensating for that requires State-owned enterprises to inject more money into the fund, while encouraging more people to participate in the pension system; the idea of making personal accounts non-inheritable is unfair.

Beijing News, May 7

For the majority, the official pension system is relatively safe because even if somebody dies at an early age, his or her paid pension contributions could still benefit the family. But now it is no longer safe, many people might possibly exit the system. If that happened, the national pension fund would face a problem more challenging than deficiencies - it would collapse.

eastday.com, May 7

A report by the Chinese Academy of Social Sciences last year shows that, increasingly, parts of the pension fund had been shifted for other uses, while a later auditing report said that some money was even used to cover government costs; these are huge losses. If the authorities really mean to fill in the deficiencies, they should save these parts first.

cnhubei.com, May 7