Pension pledge relief for many

Minister of Finance Liu Kun allayed many fears when he said at a news conference at the State Council Information Office on Tuesday that retired people will get their pensions in full across the country. That means a lot for a country with a deeply aging population.

According to the seventh nationwide demographic census in 2020, the number of people aged 60 or above had reached 264 million, which is 18.7 percent of the total, triggering fears that Chinese society might turn older before it becomes richer. However, the minister's assurance comes on the back of favorable data, such as the national social security fund having a surplus of 4.8 trillion yuan ($758.55 billion), which can take care of pension payments for over 14 months.

Also, following reforms, the national social security fund has been receiving a bigger subsidy from the central pool; it was more than 600 billion yuan in 2021.

Besides, after the introduction of a national adjustment system in 2018 more than 600 billion yuan was allocated among provincial-level administrative regions, strengthening the social security fund of provinces with relatively lower economic growth rates.

Lastly, 93 State-owned enterprises contributed 1.68 trillion yuan to the national security fund in 2021.

All these measures have helped shrink the social security fund's revenue shortfall in some provinces because of their increasingly aging populations.
More can be done to bridge this funds shortfall, such as by allocating more State capital to the national social security fund. The social security system can be further reformed to get more fund sources. For example, enterprises can be encouraged to establish enterprise pensions for employees, so that the latter get more money on retiring.

Pensions are life support for retired people. The State is obliged to provide ample care to the elderly, and the pledge of the Ministry of Finance is very reassuring.