(Xinhua)
Updated: 2007-10-25 23:52

China's pension system is still in transition. The basic structure of the revised system is a mandatory two-pillar pension comprising a "social pension" financed by employers plus "individual accounts" funded by both employer and employee contributions.

Before China began its pension reform in the 1990s, people depended on the state to contribute to their pension accounts which in fact was paid by working population.

Experts predict the fund will swell by 100 billion yuan (US$13.3 billion) a year with the deepening of China's pension reform.

However, according to the MLSS, the nation's pension funds were suffering a deficit of 900 billion yuan by the end of 2006 so the proceeds from the new policy are unlikely to solve China's pension problems particularly as the country is under mounting inflationary pressure and the population is growing older.

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