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New plan for pension funds in full swing

Updated: Sep 14,2016 4:49 PM

Twelve provinces and municipalities, including Beijing and Shanghai, have recently rolled out adjustment plans for pension funds, which is expected to benefit more than 8.5 million private sector retirees and 1.7 million retirees from government departments and public institutions.

A public document issued in April stipulates that an average 6.5 percent increase in pension funds would be granted to both groups of retirees as of Jan 1, 2016.

It is the 12th upward adjustment since 2005.

It is a policy decision that takes into account retirees’ living allowance and capacity of social insurance funds, said Su Hainan, vice-president of the China Association for Labor Studies.

In Beijing, each enterprise retiree can receive a monthly pension of 3,537 yuan ($530) after the adjustment, an increase of 218 yuan from 2015. Some provinces like Guangxi and Yunnan have released timetables to offer pensions before September.

China for the first time synchronized pension fund adjustments for enterprises as well as government organs and public institutions, whose pension systems have been unified since January.

A roughly even pension increase, or slightly higher for enterprise retirees, will be good for narrowing the gap in the previous separate pension systems, Su said.

Meanwhile, this year’s fiscal budget report shows that transfer payments of pension funds from the central government to local governments have also been increasing.

Chu Fuling, a professor at Central University of Finance and Economics, said that a rational pension fund system should secure retirees’ basic living standards, allow them to share development results and ensure governments’ solvency.

“The number 6.5 percent merely refers to the overall average rate of increase around the country, not individual amounts,” said Jin Weigang, director of the Institute for Social Security Research, Ministry of Human Resources and Social Security.

He added that specific adjustments should and will be rolled out by local governments.