context: Although Beijing has recognised that some degree of central involvement is necessary to achieve regional parity in pension funds, the real pressure will be on provincial governments, who will be held responsible for for city- and county-level fund deficits.
After many years of delay and difficulty, State Council published a plan for a pension fund adjustment system on 13 June, reports Beijing Business Today. Under the plan, central government will take three percent from each provincial pension fund and redistribute it to provinces with fund deficits. At a 11 June State Council session on the plan, Han Zheng 韩正 vice premier announced a key measure to push provincial governments to set up unified pension systems for their cities and counties by 2020.
While Beijing has pushed provincial governments to take over city-level pension funds for decades, inspections found that only four municipality cities and one province have followed through. Others have only achieved Beijing’s aims nominally, such as by setting up a provincial-level adjustment fund similar to the new central one. Han Zheng's goal calls for provinces to set up ‘real’ unified systems, which would lay the groundwork for a national system. The national adjustment fund, meanwhile, is the central government's first step towards such a national system, says Qi Chuanjun 齐传钧 Chinese Academy of Social Sciences Social Security Research Centre.