More Chinese people have access to coverage provided by the country’s government-run basic old-age insurance, since the adoption of unified management of insurance funds, according to the authorities.

China’s basic old-age insurance covered 1.05bn people as of the end of 2022, 24.3m more than a year earlier, reported the Xinhua News Agency quoting data from the Ministry of Human Resources and Social Security.

The country formally implemented the national unified management of basic old-age insurance funds for enterprise employees in January 2022, to iron out regional disparities and to make the old-age insurance system fairer and more sustainable across the country.

Since then, steady reforms have been made, with wider insurance coverage and a balance in the overall revenue and expenditure of insurance funds, said Mr Qi Tao, an official with the ministry.

Under the new unified pension management system, CNY244bn ($36bn) of old-age insurance funds were reallocated in 2022 between provincial regions to support areas that had difficulty in making payments, said Mr Qi.

Fiscal subsidies from the central government were increased, while the system for local government investment in the insurance fund was improved, he noted.

The national unified management system will be continuously enhanced and better regulated to ensure that pension benefits are paid on time and in full, according to Mr Qi.

Previously, the basic pension funds were managed locally. There emerged disparities in pension funds among provinces and regions due to differing economic conditions. For example, some eastern provinces showing good economic performance and that attract migrant labour have a surplus in pension funds, while western and northwestern areas with a larger elderly population but less developed economies, could not cover pension payments because there were insufficient contributions to these local funds as the young moved to coastal cities for jobs.

China has a three-pillar pension system, comprising the national basic old-age insurance; enterprise and occupational annuities; and commercial pension plans.

Read more @AsiaInsuranceReview