(MENAFN - AFP) China on Saturday announced a pilot programme to help pension schemes meet growing pressure from an ageing society by transferring shares of state-owned firms to social security funds.
A document released by the country's State Council, or cabinet, said the programme would begin this year with shares of up to seven SOEs to be transferred.
The plan is intended to help make up for shortfalls in the nation's pension schemes and will be expanded in 2018 to involve more state-owned companies, the document said.
An initial 10 percent of equity in the state firms will be transferred to the National Council for Social Security Fund (NCSSF), the state pension fund.
In a report on the plan, state-run Xinhua news agency said China has more than 200 million people over the age of 60, adding that the country "faces a severe challenge in meeting its pension obligations."
The problem has become particularly acute in certain regions like the northeastern China industrial belt, home to many elderly former workers at now struggling state-owned companies.
China earlier this year began allowing pension funds to invest in stocks and other assets to help expand their returns.
The State Council said the plan would help foster a more sustainable pension system and promote reform of state-owned companies.
"Over the course of economic development and the ageing of the population, the pressure on basic pension payments has continuously increased," it said.