By Dai Qi
The central government will establish a national pension insurance fund to tackle imbalances between provinces, and the new mechanism officially took effect on Sunday, the Economic Information Daily reported Monday.
The move is seen as a vital step in the country's shift from the provincial approach towards a national level plan for the pension insurance system, according to the report.
You Jun, an official from the Ministry of Human Resources and Social Security said that the policy change had originated from a sharp imbalance of fund distributions between provinces due to the distinction of population sizes.
"China's pension insurance fund used to be allocated by the provincial government. Some provinces have suffered from huge debts and relied on financial subsidies, while others have a large amount of surplus," said Guan Bo, a researcher from China's Academy of Macroeconomic Research.
You said that provinces varied considerably from each other in their social insurance base as well as rate and salary standards.
"It is hard to realize an ideal mode of collecting and disbursing the fund perfectly at a national level. The mechanisms are a first step to achieve this goal, which could relieve the pressure caused by its imbalances," said You.
He Wenjiong, an expert from the China Association of Social Security, said that the mechanism is a transition towards collection and disbursement at a national level.
Jin Weigang, dean of the Chinese Academy of Labour and Social Security, held that to integrate pension insurance fund collection and disbursement would narrow down the gaps between different provinces, which would further facilitate a natural flow of the labour force.
According to the Economic Information Daily, risk control of the fund would be a focus for the government as well as ensuring the security of the fund.
