End double-track pension system

Facing severe opposition and criticism from the media and the public, the Ministry of Human Resources and Social Security clarified to People's Daily on June 20 that it has no immediate plans to defer the retirement age. But it admitted a study about delaying the retirement age is under way, and also reiterated that delaying the retirement age is inevitable in the long run.

Although statistics from the ministry show China's pension fund accumulative balance exceeded 1.9 trillion yuan ($300 billion) by the end of 2011, it's widely believed there will be a huge gap in future pension payments and China will face tremendous pension financing pressure in the future.

As early as 2005, the World Bank predicted China's pension gap may accumulate to 9.15 trillion yuan in 2075 if the system doesn't change. A recent study by Fudan University's research group, headed by Deutsche Bank's chief economist Ma Jun, says under the current system the accumulative pension gap in 2050 will be more than 20 percent of the government's fiscal expenditure that year. And the present value of accumulative gap in the following 38 years will be equal to 75 percent of the current GDP.