Min­istry re­futes mis­lead­ing re­port, guar­an­tees fu­ture pen­sions pay­outs ‘in full’

Global Times US Edition - - BIZUPDATE -

China will fully guar­an­tee timely pay­ments of fu­ture pen­sions and sus­tain­able healthy op­er­a­tion of the pen­sion sys­tem, a gov­ern­ment of­fi­cial said Tues­day, cor­rect­ing a mis­lead­ing re­port on Mon­day which said that China’s pen­sion pot will run dry in 2035, cit­ing re­search from April.

The re­port has mis­in­ter­preted the sit­u­a­tion of China’s pen­sion in­sti­tu­tions, said an of­fi­cial from the Min­istry of Hu­man Re­sources and So­cial Se­cu­rity (MOHRSS), ac­cord­ing to do­mes­tic news web­site bjnews. com.

The com­ment came af­ter Bei­jing-based news out­let chi­na­times.net.cn re­ported that those born in the 1980s could be the first gen­er­a­tion to not re­ceive a full pen­sion upon re­tire­ment.

The re­port cited re­search by the Chi­nese Academy of So­cial Sciences (CASS), which said that the ur­ban worker pen­sion fund is pre­dicted to drop to zero by 2035.

How­ever, “the cen­tral gov­ern­ment can fully guar­an­tee the pen­sion funds will be paid on time and in full,” the of­fi­cial said.

Nie Mingjun, an of­fi­cial at the MOHRSS said in April that there are struc­tural con­flicts among dif­fer­ent re­gions re­gard­ing the pen­sion.

But China is pro­mot­ing a se­ries of re­form mea­sures to en­sure the sus­tain­able and healthy devel­op­ment of the pen­sion sys­tems, he added.

As of the end of 2018, China’s en­dow­ment in­sur­ance fund in en­ter­prises reached 4.78 tril­lion yuan ($694 bil­lion), which pro­vides a stronger guar­an­tee, Nie said.

China es­tab­lished a strate­gic re­serve fund for so­cial se­cu­rity funds since 2000, which is con­tin­u­ing to grow, reach­ing 2 tril­lion yuan, Nie said in April.

The CASS re­port used an in­ter­na­tional stan­dard to cal­cu­late the fund, and the re­sult is sim­i­lar to many de­vel­oped coun­tries with a high level pub­lic wel­fare, Dong Dengxin, an ex­pert in pen­sion poli­cies told the Global Times on Tues­day.

“The in­tent of pro­duc­ing such the­o­ret­i­cal re­search is to alert the gov­ern­ment to make pol­icy ad­just­ments, in­stead of stir­ring up pub­lic panic to sell pen­sion-re­lated fi­nan­cial prod­ucts,” Dong said.

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