Pension funds in China could run out before workers born in the 1980s retire, according to a report released by the Chinese Academy of Social Sciences on Wednesday.
According to the report, pension funds for urban employees are expected to begin declining from a peak of 6.99 trillion ($1.04 trillion) yuan in 2027. By 2035, there is a possibility of exhausting the accumulated balances, before people born in the 80s retire, the report said.
The report also noted that the current balance of pension funds in 2019 is 106.29 billion yuan, but the balance may dip below zero to 118.13 billion yuan in deficit in 2028.
The report warned that given the current demographic situation in urban China, the pressure on pension funds is steadily increasing.
According to statistics released by the National Bureau of Statistics, in 2018 there were 249 million people over the age of 60, accounting for 17.9 percent of China's population, and 167 million were over 65 years old, making up 11.9 percent of the population. In 2019, one pensioner is supported by approximately two pension payers, while in 2050 only one payer can be counted on to support each pensioner.
There is also a huge discrepancy among different provinces in terms of pension fund balances, according to the report.
The pension balance of South China's Guangdong Province outranks that of every other province by a huge margin with over 200 billion yuan—almost equivalent to the total pension balance of the next nine provinces combined. The report also estimates that in 2019, up to 16 provinces will not be able to pay for the pensions from the pension poll.
