The social-security authority says the government will fill the pension shortfall through transfer payments if it appears at the national level.

In some provinces, the pension security fund is not enough to cover the cost of pensions as the population of China ages. Many pension-takers retired in the planned economy system, and at the time, they needed to pay into the pension security fund. The pension security that the current working population is now paying will not be enough to cover both the long-time retired workers and the more recent ones. Inflation over the past several years has devalued the pension fund further.

That's why citizens worry so much about the possible bankruptcy of China's pension fund. The authority used to say that it would invest the fund in the stock market to maintain its value, but that only fueled public concerns.

Social security's solution this time comforts the people. It is an effective way to fill the pension gap, and it reflects the government's sense of responsibility in dealing with the problem.

Translated from Beijing Youth Daily

By Li Yang