House-for-pension stirs debate on perfect elder care solution
Updated: 2013-09-17 14:33
(Xinhua)
|
|||||||||||
BEIJING -- For 71-year-old Li Yuzhen, a life taking care of a sick husband and a mentally-disabled son in their two-bedroom apartment in the east China city of Hefei has not been easy.
The family of three nets a monthly income of 3,000 yuan ($487), but spends one third of it on medicine. They barely make ends meet with the rest of the money.
Li said they could not afford a nursing home, and she has to stay at home to look after her son, a man in his 40s but still unmarried due to his condition.
In an effort to explore elder care solutions for China's rapidly aging society, the State Council, China's Cabinet, vowed last week to complete a social care network for people over age 60 by 2020, when the age group is expected to reach 243 million. This group's population had already reached 194 million by the end of 2012, giving China the largest senior population on earth.
One solution proposed is the house-for-pension program.
"The plan allows you to deed your house to an insurance company or bank, which will determine the value of your house and your life expectancy, and then grant you a certain amount every month," said Meng Xiaosu, former CEO of Happy Life Insurance Co Ltd.
"You can still live in your house, but the company or the bank has ownership," Meng said.
The program, while only a suggestion, has drawn widespread concern and met with mixed views.
Zhan Chengfu, director of the division on social welfare and charity of the Ministry of Civil Affairs, said the program benefits both the elderly and insurance companies and banks as it can ease elderly care fund shortages, revitalize housing resources and expand the insurance business.
According to a joint study by the Bank of China and Deutsche Bank last year, the aging population will leave China with a shortfall of 18.3 trillion yuan in pension funds by 2013 and create a heavy fiscal burden for the country.
Zheng Bingwen, a social security researcher at the Chinese Academy of Social Sciences, likened China's pension system to a pyramid with the ground level being the basic pension pool, the middle level being companies' supplementary pensions, and the top level being individuals' commercial insurance. But the proportion of the total pension funds to gross domestic output is small compared to other BRICS nations.
"We need different channels to supplement funds shortage, and house-for-pension is likely to be a plausible way for elder care," Zhang said.
However, the proposal stirred a heated public debate, especially among people whose parents have property and fear losing the inheritance.
The idea is not new in China. Several cities, including Beijing, Shanghai and Nanjing, have tested the program since 2003, but all fared badly due to bottlenecks unique to the country.
One key barrier is China's 70-year leasehold for real estate. According to China's Real Right Law, private property can be leased for only 70 years. Though related laws also stipulate that the leasehold can be automatically extended, the cost of lease extension is not specified.
Volatility of the property market also adds to financial institutions' hesitation over the program as they worry a possible plummet in housing prices may undermine their interests.
Related Stories
Pension fund enters global top 10 2013-09-11 16:21
China mulls pension reform to ease burden 2013-08-21 15:50
China's pension insurance covers 486m people 2013-05-25 16:39
Target loopholes in pension system first 2013-05-09 08:07
SOEs may aid funding of nation's pension system 2013-04-19 10:01
Today's Top News
List of approved GM food clarified
ID checks for express deliveries in Guangdong
Govt to expand elderly care
University asks freshmen to sign suicide disclaimer
Tibet gears up for new climbing season
Media asked to promote Sino-Indian ties
Shots fired at Washington Navy Yard
Minimum growth rate set at 7%
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
Xinjiang scores on the national stage at last |
Happily ever after until the divorce |
Cure sought for the medical sector's ills |
Hanban shops around for a wider choice |
Africa looks to the Orient for lessons |
Urban push |