China is developing implementation measures for a central adjustment system for pension funds. The measures are expected to be released soon to guarantee the start of the collection and payment of the funds in the third quarter of this year, and to resolve insolvency risks faced by some local governments, an official said on Monday.
The central government will ensure the timely and sufficient payment of pensions via the adjustment system and ensure the offering of more financial support, Lu Aihong, spokesperson for the Ministry of Human Resources and Social Security, said at a press conference, according to domestic news site chinanews.com on Tuesday.
According to a circular issued by the State Council, the country's cabinet, in May, China decided to launch such a system on July 1.
After setting up the system, the funds, which are now being managed at provincial level, can be balanced among different provinces to help them step up risk prevention, the report said.
The current pension subsidy policy from the central government will remain the same, however. If a province still has a deficiency after being granted financial subsidies following central adjustment, local governments should take responsibility to cover the deficit.
By the end of June, 14 municipal and provincial governments including in Beijing, North China's Shanxi Province and East China's Jiangsu Province had signed investment contracts with the National Council for Social Security Funds, worth a total of 585 billion yuan ($86.2 billion), Lu said.