BEIJING — China is capable of ensuring full and on-time payment of aged-care pensions even after reducing business contribution to social insurance schemes, a senior official said on March 12.
According to results of repeated calculations, the income for the social security funds will still outnumber spending despite lowering of the share borne by employers for urban workers’ basic aged-care insurance, Zhang Jinan, minister of human resources and social security, said on the sidelines of the annual legislative session.
Zhang said that China’s nominal enterprise contributions to social insurance schemes are comparatively high and have some room for reduction.
“Lowering the share borne by employers for urban workers’ basic aged-care insurance can vitalize firms to expand production and employment, thus introducing more insurance payers and creating a bigger social security fund ‘pie’ to form a virtuous circle and enhance the mechanism’s sustainability,” Zhang said.
The reduction of enterprise contribution to social insurance schemes is part of China’s broader efforts to ease firms’ financial burdens by further cutting taxes and fees on businesses.
In addition to a strategic stock of about two trillion yuan ($297.9 billion) in national social security funds, China has about 4.78 trillion yuan of enterprises aged-care insurance fund in balance, representing a rather strong guarantee, Zhang added.
Efforts will be stepped up to replenish social security funds through the injection of state capital, he said.
China has decided to continue to increase the basic retirement pension in 2019, the 15th consecutive year of pension increase.