Pension Funds Shrinking in 21 Provinces, Some County Govts Not Even Paying Wages, Borrowing To Meet Pension Obligations

This is what happens when you grow old before you grow rich.
In the last of 2015, at least 21 domestic provinces on the basis of pension growth rates negative, but these provinces can still rely on the accumulated surplus to survive. However, the balance of payments situation in parts of the county pension fund bear greater pressure.
Normally the local governments can subsidize shortfalls, but some county governments aren't even paying wages due to a lack of revenue according to a source at the Ministry of Finance.
Not long ago, MoF organized a national survey.

"We slice the country to conduct research, divided into eastern, central and west, northeast of the four pieces to conduct research." The agency official, "focused on the county level." Survey results are not optimistic.

"We discovered the pensions in some places was gone." The source said, local governments will also be very difficult, "found some of the county's have no money to pay wages."

The pension fund in case of income over expenditure, and often rely on local finance, but local governments will also be very difficult, "rigid demand is growing."

According to "China Pension Development Report 2015", in 2014 Shandong urban and rural residents basic old-age insurance fund balance was 10.902 billion yuan, while there was only 61 million yuan in Xinjiang military pension fund.

Compared with 2013, current balance Shanghai decreased by 859.02%, 291.36% reduction in Jiangxi. Statistics show that there is negative growth in 21 provinces.

It is reported that the relevant departments of the central statistics show that after 2014 the basic pension insurance fund corporate deduction for financial assistance, current income doesn't meet expenditures in 22 provinces.

But it's still rate to have a situation where pension funds are completely spent.

"China Pension Development Report 2015" Data show that in provincial units, each province's cumulative surplus urban workers basic pension insurance is still positive. The accumulated surplus is smallest in Qinghai Province, but the accumulated surplus is more than 8.4 billion yuan.

However, the Chinese pension funds nationally are relatively low, so most provinces rely on financial subsidies.

The aforementioned sources said, "Now the one hand, more and more rigid expenditure;? On the other hand the economic downturn, a significant decline in tax revenues, and that in this case how to do"

"The central economic work conference just concluded, or tax cuts in 2016, after the tax reduction will be under more financial pressure on the deficit if we do, we can not be maintained by debt deficit next fiscal sustainability? It is the financial risk. "
Some places are borrowing money to pay pensions.
It is said that the National People's Congress Working Committee budget survey also found that, in some places they are meeting pension obligations through borrowing.

For example, more than one-third of Japan's fiscal expenditure is pension expenses, and taxes are insufficient to cover these expenses, can only meet obligations with debt, Japan's debt more than 200%, ranked the highest in the world.

The aforementioned MoF insider said, "I went to Japan to explore with them, say how Japanese debt is so high there is no problem, it seems very good, is not the government will be able to rely on borrowing to maintain indefinitely? Nobody in the world can now explains a theory The Government will be able to rely on borrowing to maintain your expenses is growing, or to rely on debt to maintain the pension, it is clear that the risk is great, the Japanese are also very worried, maybe one day his high debt station a crash, it means that the entire country disaster."
This is not a problem only for the poorer provinces. Even wealthy Shanghai and Zhejiang province are spending 90% of pension revenues:
"And from all the provinces of expenditure to income ratio, we see so much of the next financial subsidies, the expenditure of income than in most provinces is very high, Shanghai, Zhejiang has 90 percent, meaning that close up the money basically all spent out. "Central China Normal University Social Security Discipline leader Professor Sun Yongyong representation.

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