China's pension funds under pressure with rising payments: Xinhua
- Wall Street surges to new highs; transports set record
- lululemon athletica (LULU) Tops Q3 EPS by 4c; Adj.-Comps Outpaced Views
- Abbott (ABT) Files Complaint to Terminate Alere (ALR) Acquisition
- Costco Wholesale (COST) Tops Q1 EPS by 5c; Comps Up 1%, 2% Ex-Gas
- After-Hours Stock Movers 12/07: (VYGR) (LULU) (HRB( Higher; (OHRP) (VRNT) (CMTL) Lower (more...)
Get access to the best calls on Wall Street with StreetInsider.com's Ratings Insider Elite. Get your Free Trial here.
BEIJING (Reuters) - Many Chinese pension funds are under renewed pressure to break even as local governments race to increase pension payments to meet central government requirements, state news agency Xinhua said in a commentary on Tuesday.
The central government has ordered pension payments for corporate retirees to be increased by around 6.5 percent in all provinces, Xinhua said.
China's northeastern region of Liaoning has implemented a 6.75 percent rise in pension payments, which is estimated to cost the fund around 11 billion yuan ($1.65 billion).
Liaoning's pension fund deficit was 10.5 billion yuan in 2015, Xinhua said, citing an annual report published by China's Ministry of Human Resources and Social Security.
Pension funds in six provinces, including all three rustbelt provinces Liaoning, Heilongjiang and Jilin, already struggled with deficits in 2015, according to the report.
Despite the pressure to balance rising costs, the article said "systematic fiscal stipends would ensure costs to be balanced and that all retired corporate employees would receive full pension payments on time".
China's State Council, or cabinet, said late last year that dividends and income from state enterprises would be used to fill in gaps at pension funds and other social security funds, as part of plans to reform its inefficient and heavily indebted state-owned sector.
Xinhua said the coastal province of Shandong has spearheaded this effort, with Shandong transferring a sum of 18 billion yuan ($2.7 billion) so far and Shanghai planning to put no less than 19 percent of state enterprise income to subsidize the fund.
(Reporting by Yawen Chen and Nicholas Heath; Editing by Jacqueline Wong)
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- UPDATE: Stryker (SYK) Raises Quarterly Dividend 11.8% to $0.425; 1.5% Yield
- More women on boards=higher dividend rates: James Saft
- Trump fills homeland security, environment, China ambassador jobs
Create E-mail Alert Related CategoriesReuters
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!