Reforms can fortify old-age insurance plan

China has established an institutional old-age insurance framework covering workers and residents. The employees' basic pension insurance system combines social funds and personal accounts for 380 million workers nationwide. It has also established a basic old-age insurance system that covers 500 million urban and rural residents.

Together, the two old-age insurance plans cover 880 million people. Based on the estimation that China has about 1 billion people above the age of 16, the country's old-age insurance plans' coverage rate is about 88 percent.

In 2008, the accumulated balance of the two old-age insurance funds was 992.5 billion yuan ($149.07 billion), which increased to 4.40 trillion yuan last year, indicating the strong payment capacity of old-age insurance funds. Although in some provinces and regions the growth rate of basic old-age insurance funds has been lower than the growth rate of expenditure, the reverse is true in others. Which means the accumulated balance of China's basic old-age insurance funds will continue to rise.