Press conference on corporate social insurance premium reduction to support epidemic prevention and control

A press conference was held Thursday afternoon to brief the media about issues on provisional reduction or exemption of employers' social insurance and medical insurance contributions and deferral of corporate payments to the housing provident fund.

China SCIO February 22, 2020

China Review News Agency (Hong Kong):

In the enterprise social security payment relief policy introduced, pension insurance premium relief enjoys the largest cut. With the huge reduction of funds, will there be any problem in this year's pension payment? What will the Ministry of Finance do? Thank you.

Yu Weiping:

Thank you for your question.I believe this issue is also the concern of the large number of retirees. First of all, I would like to say that in recent years, the actual operation of the old-age insurance system has been smooth. Although population aging has increased the pressure on pension fund income and expenditure in some areas, the accumulated surplus in funds is still increasing. By the end of 2019, the cumulative balance in the basic old-age insurance fund for enterprise employees had exceeded 5 trillion yuan. The phased reduction and exemption policy is expected to see the pension fund income reduce by 471.4 billion yuan. Although the fund income will decrease, it will still be within a controllable range, ensuring that pensions are paid in full and on time.

Of course, we have also taken note that there is an imbalance in the pension surplus among provinces. For this reason, we have made detailed calculations with the Ministry of Human Resources and Social Security and have a plan in place. We plan to take a series of measures to help local governments pay pensions in full and on time. We will carry out the four following measures:

First, the Central Government will scale up supplement to the basic pension fund. In recent years, the Central Government has continuously increased its subsidies to basic pension funds, especially for the central and western regions and old industrial bases where the imbalance between revenue and expenditure is more prominent. From 1998 to 2019, the Central Government's subsidies to the basic old-age insurance fund for enterprise workers totaled more than 4 trillion yuan, of which 526.1 billion yuan was arranged in 2019. This year, we will continue to increase the subsidies to help local governments ease the pressure on the fund caused by the phased fee reduction.

Second, we will increase the Central transfer of pension funds. In 2018, China established a central transfer system for pension insurance funds for enterprise workers, which has played a key role in effectively balancing the payment burdens of local governments in different regions. In 2019, the central and western regions and the old industrial bases benefited more than 150 billion yuan through the Central transfer of the fund. This year, the proportion of transfer will be further increased, and the size of the central transfer funds will be correspondingly increased.

Third, we will increase the transfer of part of the state-owned capital to enrich the social security funds. In order to make the social security fund more sustainable, Premier Li Keqiang chaired a State Council executive meeting in July 2019, which decided to comprehensively promote the transfer of part of the state-owned capital to enrich the social security funds. By the end of 2019, the Central Government had completed the transfer of the state-owned capital of 81 central SOEs and central financial institutions in four batches, totaling 1.3 trillion yuan. The work is now being carried out at the local level too. Next, we will work with the relevant departments to complete the transfer work in a pragmatic and efficient way.

Fourth, we will step up reform of the basic pension funds. In accordance with the deployment and decisions made by the CPC Central Committee and the State Council, we will cooperate with the Ministry of Human Resources and Social Security and other departments to promote reform of the basic old-age insurance system; accelerate the establishment of a national coordination system for basic old-age insurance, establish and improve a reasonable adjustment mechanism for basic old-age insurance, strengthen the system's restraint mechanism and continuously enhance the sustainability of the system.

With these measures, we can achieve two goals.First, we will implement the policy of phased reduction or exemption of social insurance premiums and effectively reduce the burden on enterprises, especially SMEs. Second, we will ensure that basic pensions are paid in full and on time and effectively protect the pension rights and interests of the vast number of retirees. Thank you.

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