Experts urge effective pension-adjusting mechanism

In the third quarter of 2012, the country's GDP grew by 7.4 percent year-on-year, slowing for the seventh consecutive quarter and down from 7.6 percent in the second quarter and 8.1 percent in the first, according to the National Bureau of Statistics.

China's consumer price index, a main gauge of inflation, grew 2 percent year-on-year in November, up from a 33-month low of 1.7 percent in October.

Zheng suggested that China should set up a permanent mechanism for adjusting corporate pension.

"The adjustment mechanism can take into full consideration the country's GDP, CPI and average salary," the CASS researcher said.

Zhou Tianyong, a professor with the Party School of the Central Committee of the CPC, echoed Zheng's view, saying that a sudden break in the trend of consecutive pension raises may provoke discontent.

More importantly, without a long-term mechanism for pension adjustment, the country's basic pension funds will find it difficult to strike a balance, the professor believes.

"If the pension funds of local authorities see an increasing amount of deficits, central financiers will have to make transfers to maintain their balances," he said.

Pension funds for retirees are set to face tremendous pressure as the proportion of old people in the country's total population is on the rise, according to Zhou.

 

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