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China to Help Shortfalls in Pension Funds

China to Help Shortfalls in Pension FundsChina to Help Shortfalls in Pension Funds

China on Saturday announced a pilot program to help pension schemes meet growing pressure from an ageing society by transferring shares of state-owned firms to social security funds, AFP reported. A document released by the country’s state council, or cabinet, said the program would begin this year with shares of up to seven SOEs to be transferred. The plan is intended to help make up for shortfalls in the nation’s pension schemes and will be expanded in 2018 to involve more state-owned companies, the document said. An initial 10% of equity in the state firms will be transferred to the National Council for Social Security Fund, the state pension fund. In a report on the plan, state-run Xinhua news agency said China has more than 200 million people over the age of 60, adding that the country “faces a severe challenge in meeting its pension obligations”. The problem has become particularly acute in certain regions like the northeastern China industrial belt, home to many elderly former workers at struggling state-owned companies.

 

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