Officials are trying to alleviate the pension crisis by delaying retirement and increasing contributions. On November 4, the Chinese government issued the “Personal Pension Measures,” officially launching personal pension investments in the public fund industry.
The “Vision Times” commented that the disadvantages outweigh the benefits. It could be seen as paying 12,000 yuan (about $1,600) per year to buy the government’s public investments from a few selective banks.
Specific retirement savings services include three types: complete withdrawal, partial withdrawal, and deposits without withdrawal. Term products are divided into four classes: five years, ten years, 15 years, and 20 years. Among the four types, the 5-year term interest rate is higher than large commercial banks.
According to Chinadaily, From November 20, ICBC, the Agricultural Bank of China, the China Construction Bank, and the Bank of China will carry out pilot projects on specific pension savings in Hefei , Guangzhou , Chengdu , Xi’an , and Qingdao.
During the evaluation period, the total amount of pensions a pilot bank is allowed to do business with is limited to less than 10 billion yuan (1.3 billion dollars.)
According to data from the World Health Organization, 18 years from now, 28% of China’s population will be over 60 years old, up from the current 10%, making it one of the countries with the fastest-aging population in the world.
According to a report by the state-run media outlet , the largest retirement wave in history will hit China in the next ten years at a rate of 20 million people annually.
Pensions for the elderly have long raised questions in China. According to Vision Times, based on analysis of the most recent data, the government has reportedly been hiding a significant pension gap by using the pensions paid by the working class to pay the retired. Pension payments will be difficult to handle once the crisis is at its worst.