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Social pension service problem in China - Essay Example

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This is because China is still a young nation that is preoccupied with socio-economic and political challenges such as providing education to the young, building strong economic foundations, and…
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Social pension service problem in China
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Social pension service problem in China

Download file to see previous pages... Unlike other developed countries that have put in place mechanisms to cater for the welfare of the aged, China’s aging pattern is taking place much earlier than anticipated and in the midst of social and economic development (Yuan 2007). Perhaps this is the backbone of social pension service problem in China. In fact, low legal retirement age regulations and actual premature retirement are catalysts for the burden on society and families in supporting those who have retired. However, individuals can decide on what age to retire, based on their preferences between work and leisure and between their own consumption and their children’s inheritance. Given the increasing supporting ratio and pension fund shortage in China, universal early retirement can further aggravate the situation.
Pensions are a particularly important part of the social services provided by the Chinese government where reform can play a major role in rebalancing China’s economy. Moreover, the need to iron out the problems bedeviling the social pension service system in China and establish a sound pension system is especially pressing because of the acceleration in the aging of the population. For the past two decades, a lot of efforts have been put into the process of reforming China’s social pension service. The aim of this reform process is to put in place a social pension service for the entire urban and rural population. A lack of a comprehensive social pension service is in itself a social problem of the retired and aging population (Woo 2012).
The pension system was set up after the founding of the socialist economy, whereby Chinese nationals and/or citizens were guaranteed employment in state owned enterprises or other state institutions with all of the attendant social benefits. The benefits were provided directly by enterprises, and the system was financed by enterprise contributions topped up by fiscal allocations. The initiation of reforms saw a ...Download file to see next pagesRead More
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