CX Daily: China’s Pension Plan Faces Prospect for Change or Going Bust

Pension /

Cover Story: China’s pension plan faces prospect for change or going bust

China’s pension plan for employees of state-owned and private businesses is facing the likelihood of major reforms or the prospect of going broke.

Demographic shifts are putting pressure on the system. Under the pension plan for so-called enterprise employees – which covers non-government workers -- current employee contributions fund payments to retirees. As the working-age population shrinks and the number of retired workers grows, the younger population is increasingly burdened, weakening their incentive to participate in the retirement program.