February 15th, 2011
Econintersect: There has been a lot of publicity about underfunded pension plans in the U.S., but the problem is also 'emerging' in the 'emerging market' of China. Shanghai is reported to have a social security fund gap. The government is reported to be readying for land auctions and sale of state-owned enterprises to raise funds to pay retirees, currently 3.4 million in Shanghai and growing due to an aging population. Follow up:
Follow up:From Shanghai Daily:
The local authority is researching the feasibility of taking part of the proceeds from state-owned enterprises and the sale of land plots to make up the funding gap, but no details are available, the China Economic Weekly magazine reported yesterday, citing unnamed sources from the local reform and development commission and local state-owned assets supervision body.
Shanghai Human Resources and Social Security Bureau said yesterday it was unaware of the issue.
The social security fund gap means that money currently paid into the fund by workers and companies is not enough to pay for retired people's pensions.
Shanghai Party Secretary Yu Zhengsheng said in January that the city was putting in more than 10 billion yuan (US$1.5 billion) a year from its fiscal revenue to make up for the shortfall.
Shanghai allocates about 10 percent of its city-level fiscal income to the social security fund, Yu told city lawmakers last month. Shanghai has 3.4 million retirees and the figure is set to rise due to its aging population.
Source: Shanghai Daily