Shanghai is considering freezing the pay of civil servants in an attempt to plug an annual shortfall of more than 10 billion yuan (HK$11.82 billion) in its pension fund, a top city party official said.
Despite the huge gap in its finances, the municipality's pension payments are still far below the national average, Shanghai Communist Party secretary Yu Zhengsheng was quoted as saying by the China Economic Weekly.
'Compared to civil servants, there are many others with much lower incomes, such as retired workers, whose pensions are at a very low level,' Yu said. 'Shanghai retired workers get 1,800 yuan a month, which is lower than the level in Beijing.'
The magazine said Yu made the previously unreported comments at closed-door meetings during the city's People's Congress and Political Consultative Conference last month.
Research by the Shanghai committee of the Jiu San (September 3) Society showed that pension payments in Shanghai over the past five years equated to 44.9 per cent of average earnings in the city - against the national ratio of 64 per cent.
Yu said the low pension level in Shanghai was due to 'historical reasons'. The fund was covered by current contributions and its sources of income were insufficient.
'It is in deficit and requires an annual subsidy from public finances of over 10 billion yuan,' he said.
