[The Epoch Times, August 1, 2022](The Epoch Times reporters Ning Haizhong and Luo Ya reported) At the time of the economic downturn, unemployment and retirement, the government began to implement a personal pension system this year, and recently announced the establishment of a specific pension system Savings pilot, but people have expressed distrust.
Officials launch “special pension savings pilot”, people are skeptical
The China Banking and Insurance Regulatory Commission and the People’s Bank of China jointly issued the “Notice on Carrying out the Pilot Program of Specific Pension Savings” on July 29, stating that four large state-owned commercial banks, namely the Industrial, Agricultural, China and Construction Banks, will be established in Hefei, Guangzhou, Chengdu, Xi’an and Qingdao. Carry out pilot projects for specific retirement savings products. The pilot products include lump-sum deposits and withdrawals, partial deposits and lump-sum withdrawals, and lump-sum deposits and zero-withdrawals. The term is divided into 5 years, 10 years, 15 years and 20 years. The interest rate is slightly higher than the listed interest rate of the five-year time deposit of large banks. That is a little over 3%.
According to the notice, the pilot program is to implement the decision and deployment of the CCP’s top authorities on the “third pillar pension insurance”, “further enrich the supply of pension financial products, and meet “diversified pension needs.”
According to the “notice”, the pilot is expected to start around November this year. The pilot scale of a single bank shall not exceed RMB 10 billion, and the pilot period shall be one year. Depositors can deposit a maximum of RMB 500,000 in the principal of specific pension savings products in a single pilot bank.
But after the announcement was made, the Chinese people expressed their distrust of the government. Weibo netizens left messages: “Play a new trick to dig the wallets of the common people”, “Calculate the common people every day”, “Do I look too foolish?” “I’m sorry you can only be okay: is the bank trustworthy?”” Putting money anywhere is safer than putting it in a bank.” “Haha, if you can’t get it out for five years, you won’t be able to get it out, and it will take twenty years.” “Good things can be spread to our ordinary people.”
Mr. Wang, a mainland citizen, told The Epoch Times on July 31 that this is obviously because the pension is not enough, and he deceives the common people to save it, “fooling the common people all day long.”
Analysis: The “first pillar” of pensions is in short supply, and the second pillar is not true to its name
According to the official statement, the CCP claims to have initially established a “three-pillar” old-age insurance system that includes basic old-age insurance, enterprise and occupational annuities, and individual commercial old-age insurance.
Li Hengqing, an economist based in the United States, told The Epoch Times on July 31 that there are three so-called pillars. The first is the pension in the social security fund. This part of the money is actually the money paid by enterprises and individuals, and the government holds it on its behalf. Then when the worker gets old, it will be returned. But now the money is not making ends meet. There was a huge shortfall a few years ago.
According to public information, last year, the basic pension gap of the first pillar of China’s pension reached 700 billion yuan. The Insurance Association of China reported that in the next 10 years, the national pension gap is expected to be 8 trillion to 10 trillion.
According to the report “China Pension Actuarial Report 2019-2050” by the Chinese Academy of Social Sciences, the deficit of the basic pension insurance fund for employees of urban enterprises across the country is getting bigger and bigger, and the accumulated balance will be exhausted by 2035. The “post-80s” are likely to become the first generation without pensions.
Li Hengqing said that the old-age insurance used to be managed by the provinces themselves, but later some provinces were unable to pay out the money, and the CCP engaged in national pooling, allowing the provinces with more income than expenditure to use their excess money to make up for the shortfalls. Some local officials quit. He said that the money I deducted from the salaries of the employees was used to give it to the places where there was a shortage. When these employees need to receive pensions, we will find someone to go to.
“In addition, the second pillar is not actually a pillar. It is actually a pension for enterprises. It turns out that some state-owned enterprises, especially central enterprises, have pensions. Private enterprises do not have this part at all. State-owned enterprises can pay very little pension, so they can’t come up with this money.” Li Hengqing said.
The Daily Economic News reported on July 21 that, as the “second pillar”, corporate annuities and employee annuities have limited coverage in recent years. According to data disclosed by the Ministry of Human Resources and Social Security, only about 3.85% of the national employed population has participated in enterprise annuities or employee annuities.
From “government for old age” to “own old age”
As for the so-called third pillar of old-age care, it is the current savings-for-age pension, and the old-age with one’s own savings.
The source of the CCP’s policy for piloting personal pension savings is the “Opinions on Promoting the Development of Personal Pensions” issued by the General Office of the State Council of the Communist Party of China on April 21 this year. This is the first official introduction of a personal pension system.
Li Hengqing told The Epoch Times that the CCP originally said that family planning is good, and the government will provide for the elderly. This is the government’s promise to you, but it has never fulfilled its promise. Dare to say anything when fooling you, and when it’s time to fulfill its obligations, a slogan will solve everything.
In recent years, there have been a series of newspaper screenshots circulating on the Internet: from “only one child is born, the government will take care of the elderly” (1985) to “only one child is born, the government will help the elderly” (1995), to “the elderly cannot rely on the government” (2005). ), and then to “It’s better to postpone retirement and take care of yourself”… The CCP has now begun to develop a personal pension system. Netizens lamented that it seems that the elderly can only rely on themselves.
In 1985, “only one child is born, and the government will take care of it”; in 1995, “only one child will be born, and the government will help to take care of the elderly”; in 2005, “the government cannot rely on the pension for the elderly”;
In 2012, “It’s better to postpone retirement and take care of yourself”;
In 2015, “Let go of second child birth”.
2021 “Implement the policy that a couple can have three children.” pic.twitter.com/Sd36EOrjm9— Liu Xiaoyuan (@liu_xiaoyuan) June 1, 2021
Amid the epidemic, the economy shrinks, unemployment, and retirement
The official media “Banyuetan” earlier published an article saying that between now and the next 10 years, China will usher in the largest “retirement tide” in history, and the post-60s group will continue to enter retirement life, with an average rate of 20 million people retire each year.
Li Hengqing said that the CCP has always been engaged in family planning in the past, and the one-child policy has caused the structural aging of China’s entire society.
At the same time as the population is aging, under the deep blow of the CCP’s zero-epidemic and anti-epidemic policy, the second quarter economic data released in July showed that the Chinese economy experienced the slowest growth rate in 28 years, only 0.4%. And this data is still questioned as having moisture. In June, the unemployment rate of urban youth aged 16-24 climbed to 19.3%, a new high.
Li Hengqing believes that now China’s economy and society as a whole has begun to collapse completely, and the Minsky moment has come, and it is no longer the time to collapse without collapse. Several major events in China’s economy recently, including the suspension of real estate loans and the explosion of village banks, show that the dominoes are starting to fall.
“The economy is already rotten to such a degree. The CCP has piloted individual pensions in five cities, and the mission it is trying to achieve is to hold down all the deposits and solve the potential risk of breaking its capital chain,” said Li Hengqing.
However, he believes that now the CCP government has completely broken its trust. “I guess there are not many people who are really enthusiastic and stupid, and are ready to accept the government’s advice to do this kind of pension.”
Epoch Times reporter Yi Ru also contributed to this article
Responsible editor: Li Muen