(Yicai Global) April 25 -- The financial condition of China's national pension fund has deteriorated.
The sustainability of the existing pension system is at a low level, and the national fund may collapse if no changes are made before the account balance is depleted, Yang Yansui, director of the Tsinghua Center for Employment and Social Security, said at the 2017 Tsinghua Pension Industry Forum on April 23.
A report previously published by Tsinghua University indicates that a funding gap has already occurred at the pension fund, with pensions paid from a historical surplus, meaning that the pension system has run into the third-grade risk territory (the fourth-grade being the lowest risk rating).
Other scholars have already issued similar warnings in the past. Basic individual pension accounts had run up a deficit of USD683 billion (CNY4.7 trillion) in 2015, and the total historical surplus available at the pension fund was only CNY3.534 trillion that year, which means the surplus will be depleted soon if the gap between basic pension assets and liabilities keeps widening at the current rate, Zheng Bingwen, head of the social insurance institute of the Chinese Academy of Social Sciences, wrote in his China Pension Development Report for 2016.