China’s Pensions Struggle with Underfunding
Aging population in China puts pressure on retirement system
BY Caroline Cakebread | December 12, 2017
Chinese pensions funds are struggling with the impact of China’s aging population. According to a report by Reuters 13 pension funds across China only have enough money to pay less than a year’s worth of pensions, highlighting a growing problem of shortfalls in the country’s pension plans. Quangdong province, with the biggest sum of accumulated pensions, can pay just 55.7 months worth of pensions while the pension fund of China’s northeastern province, Heilongjiang is 23.2 billion yuan ($3.51 billion) in deficit, with almost 20 percent of the 267.4 billion yuan worth of funds transferred from the central government to Heilongjiang in 2016 spent on social security expenditures.
China’s urban workers’ pension funds have also seen expenditures balloon — total expenditures grew by 23.4% for the year while total incomes only grew 19.5 for the same period.
At the end of 2016, China had more than 230 million people over the age of 60, according to Joe Jiang, deputy director of pension insurance at the Ministry of Human Resources and Social Security Jia Jiang who added that by 2050, the ratio of pensioners to workers will be 1:1.3.