(Yicai Global) April 17 -- China will increase pension payments by an average 5.5 percent, benefiting more than 89 million former corporate workers and over 17 million former employees of government departments and public institutions, the state-run official news agency Xinhua reported.
Following cabinet approval, the Ministry of Human Resources and Social Security and the Ministry of Finance jointly issued a circular saying that the pensions of those retirees' would be raised from the start of this year, the report said.
The basic pension for former company employees rose by at least 10 percent a year between 2005 and 2015. The rate slowed to 6.5 percent last year. China has hiked the basic pension for corporate retirees for 12 consecutive years since 2005, with the individual monthly pension rising to about CNY2,400 (USD349) in 2016 from CNY640 in 2005.
The government faces as increasingly heavy pension burden due to the widened coverage of the basic pension system for employees, a growing army of pensioners and a rapidly aging population. As pension funds come under increasing pressure to stay solvent, seven provinces failed to make ends meet last year.
"Adjustments will be calculated from Jan. 1, 2017, and retirees will receive the relevant pension payouts by the end of September," said Jin Weigang, head of the Institute of Social Security at the social security ministry.