Bigger pensions win little praise

China's yearly increases in pensions in the past decade have drawn less praise than questions as surging prices, widening gaps and regional unbalance dampen the happiness of the country's 74 million-plus retirees.

Official data showed that the pension per capita rose from 714 yuan (116.98 US dollars) per month in 2005 to over 2,000 yuan in 2014 following another 10-percent pension lift. The increase, a move regulated by the State Council, China's cabinet, became effective on the first day of this year.

Li Zhong, spokesman of the Ministry of Human Resources and Social Security (MOHRSS), told Xinhua that the pension increase in 2014 was determined by factors such as average salary growth, price hikes, pension funds and financial capacity.

However, retirees haven't had time to celebrate the extra cash, as they still have to budget carefully for expenditures due to the growing cost of life necessities.

"Meat, vegetables and cooking oil are becoming more and more expensive," said Xie Shujuan, a retired worker in southwest China's Chongqing municipality. "Pork prices were at least doubled in the past five years."

Since Xie retired in 2009, her pension increased from 800 yuan to nearly 1,200, which is just enough to maintain her basic living costs.

Zhou Tianyong, a professor with the Party School of the Central Committee of CPC, pointed out that the mild growth of the consumer price index (CPI) in past years didn't show the surging prices of life necessities such as meat, eggs, rice and cooking oil, which make up a large part of retirees' consumption.

"People applauded the increased pension while worrying about affording daily food," Zhou said.

China has boosted its pension adjustments regularly since 1997. In 2012, the country stressed the adjustments in its social security guidelines for the period from 2011 to 2015.

"A mechanism must be established to adjust pensions with the inflation rate and life necessity price increases, as well as taking into consideration the salary standard," said Xiong Hui, a professor with Southwest University of Political Science and Law (SWUPL).

The pension issue has also led to questions about unfair gaps between pensions for different enterprises and government organs, between state-owned companies and private companies, and especially between urban and rural residents.

In China, the median rural pension is 720 yuan every year, only 60 percent of the 1,200 yuan pension seen in urban areas, according to official statistics.

Chen Bulei, another professor with SWUPL, said that the country's pension system has different standards based on occupation and household registers, which has harmed fairness.

He also said it is unfair for the country to cover the personal payment pension portion for in-service civil servants and employees in public institutions.

According to a key decision by the CPC published last year, the pension system for government and public institution employees will be reformed. Chen suggested civil servants pay their share into the pension pool, just as other citizens do.

In 2013, gross revenue of social insurance funds stood at 3.29 trillion yuan, and gross expenditures totaled 2.65 trillion yuan, but some areas needed fiscal support, which led to greater pressure as the aging problem vexed the country, said Hu Xiaoyi, deputy head of the MOHRSS.

The basic pension funds are the base of China's entire pension system and are responsible for covering current payments. However, basic pension funds can only be invested in through bank deposits or treasury bonds, which bear high risks of devaluation.

MOHRSS head Yin Weimin said that market-oriented pension investment operations will be promoted to tackle the risks of devaluation in order to preserve the long-term balance of the pension funds.

Meanwhile, pension investment should be conducted prudently and the central government must not unleash operations to make them totally free for local investment, as it would be extremely risky, warned Chu Fuling, director of social security research of the Central University of Finance and Economics.