‘On time and in full’: China’s Premier Li Keqiang seeks to ease fears over pension payments
Premier says contributions by businesses and individuals will be cut
The government would meet its pension obligations, Premier Li Keqiang vowed on Wednesday, saying payments would be made “on time and in full”.
Li also pledged to bolster the medical insurance scheme, promising to expand direct payment for hospital bills beyond the city level within one to two years.
He also pledged that business and individual contributions to social security would be cut.
READ MORE: In brief: Premier Li Keqiang on China’s growth target, US elections, and the future for Hong Kong and Taiwan
Successfully managing the mainland’s vast social security net – spanning pensions, medical care, unemployment, work safety and maternity and housing subsidies – is one of the biggest challenges the leadership faces.
The pension system, for instance, is under strain from the greying population and a shortfall in funding which could rise as high as US$11 trillion in the next 20 years. Businesses complain the contributions are too high while workers fear they are paying in more than they will eventually get back. And slowing economic growth only adds to the overall uncertainty.
But the premier sought to reassure the nation that the leadership could steer the system and ease the burden by cutting business and individual contributions.
“Nationally speaking and in the long run, there will absolutely be no problem in meeting pension payments … Ensuring that the elderly will be provided for cannot and will not be an empty promise,”
READ MORE: For a healthy and sustainable pension system, China must fill the funding gap
