China to face 18 trillion yuan deficit in retirement pension funds by 2013: report Published: 2012-6-14 18:15:00

China is to face a huge shortfall in retirement payments, which will reach 18.3 trillion yuan by 2013, according to a recent report conducted by the economists of Bank of China and Deutsche Bank.
The aging population of China will aggravate the deficit in China’s retirement pension funds, said the report, which suggests raising the retirement age to cope with the ballooning shortfall.

@有无相生: We need to be extremely cautious before we raise the retirement age because it may cause public anger like it already has in a few European countries. Honestly, raising the retirement age is one means to ease the financial pressure of a huge pension shortfall, but it essentially does not address the problem. What we need to do is find the rooted cause of the shortfall before we take action. Collecting more contributions from individuals by raising their retirement age but not carrying out efficient reforms on the pension system could easily cause public distrust over the government.

Only when the public lacks the means to live on can they totally feel the fear of a possible social crisis. The reality is gradually approaching the public’s bottom line.

@遨游博海: The huge pension shortfall is not the most urgent issue as it does not happen suddenly. Therefore, we will not experience the same crisis as the EU nations. The most urgent thing we need to focus on is the duel pension system. Government employees and those who have bianzhi (according to which a person’s salary and other reasonable expenses are supported by government finance), need not make their contribution to their personal pension account, but enjoy more retirement payments after they retire than ordinary people who need to hand in their pension payments monthly to their account, according to the system.

@于清雯: What the government contributes to people’s pension account takes up only a small portion. We still need to rely on ourselves to ensure our happiness when we get old. Working hard when we’re young is not only necessary to enhance our life but also helps us prepare for the future when we’re old. We can not totally rely on our children after we get old.

@梁丽: Is the elderly population of China the only reason why there is a huge deficit in the nation’s retirement payment system? The management of some social security bureaus is in disorder, for example, they allow people who have not retired or are about to retire to draw their pension by giving the bureau some 10 thousand yuan. However, employees are not allowed to withdraw their pension before they have retired, according to the rule. Are these illegal loopholes not the reason why there is a huge shortfall? Will raising the retirement age work effectively if the fundamental causes for the problem are not found?

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