China is capable of paying pensioners on time, despite deficits in the endowment insurance funds in some provinces and the pressure brought by a quickly aging population, social security authorities said.
From January to May this year, the endowment insurance funds for enterprise employees received 1.58 trillion yuan ($231 billion), up by 23.9 percent year-on-year, while the expenditure stood at 1.35 trillion yuan, an increase of 23.2 percent, according to a statement released by the Ministry of Human Resources and Social Security on June 22.
The surplus of the funds had reached 4.08 trillion yuan by May.
Payments from enterprises to the funds have been on the rise as the Chinese economy recovers, the statement said. From January to May, the growth rate of payments from enterprises to the fund stood at 10.4 percent.
“Based on the current situation, the endowment insurance funds will have larger receipt than expenditure all the year through, making the surplus increase continue,” the statement said.
However, the ministry conceded that the funds are unevenly distributed in the country due to unbalanced economic development.
“While the surplus in the eastern part of the country is big, that in the middle and western parts is small. Northeast China, which is an old industrial base with a large number of pensioners but a limited number of insurance payers, sometimes sees its fund expenditure larger than the receipts.”
The ministry said it will regulate the surplus and deficit of endowment insurance funds in more regions to make supply and demand more balanced.
As of the end of last year, 379 million people were covered by endowment insurance for enterprise employees－25.69 million more than at the end of 2015.
In China, there is also endowment insurance for rural residents. In total, 508 million people were covered by the endowment insurance program by the end of May, and 159 million were receiving pension payments.
The government, while increasing its investment and transferring some State-owned capital into the endowment insurance fund, will also promote the marketization of the fund by putting it into investment to preserve and increase its value, the statement said.
According to the ministry, the central government has invested 2.57 trillion yuan in the endowment insurance fund since 1998.
The statement also said the public endowment insurance system will be supplemented by occupational and corporate pensions, personal savings and commercial endowment insurance.
Financial safety will be made the top priority as China strengthens efforts to develop commercial endowment insurance, Huang Hong, vice-chairman of the China Insurance Regulatory Commission, told a news briefing organized by the State Council Information Office on Friday.
“Endowment insurance is what people rely on for their old age and in illness. Therefore, it’s important for the endowment fund to have a steady financial return, and must not be put in areas with high financial risk,” Huang said.
He said his commission will issue rules and regulations for supervising commercial endowment insurance funds, while risk control and financial capability qualifications for commercial insurance groups will be raised.