Pension Confusion

　　Recently, an experimental house-for-pensionscheme has gained widespread attention. InSeptember, the State Council, China’s cabinet,issued a document pledging to establish a socialcare network for people over the age of 60 by2020. The house-for-pension program, alongwith other policies like encouraging privateinvestment in elder care services, is included inthe pledge.

　　Under the program, the elderly would be ableto deed the housing property they own to banksor insurance companies and receive a certainamount of money every month based on theevaluation of the property and the owner’s lifeexpectancy. The applicants would retain theright to use the house; but when they pass away,the house would be withdrawn by the financialinstitutions.

　　The program is said to be an experiment in alleviatingpressures brought by the nation’s agingpopulation. China’s elderly population reached194 million at the end of 2012 and is expected tohit 243 million in 2020, according to a report byChina’s Research Center on Aging.

　　The idea of mortgaging houses for a pensionis not new in China. Similar programs have beenpiloted in cities including Beijing, Shanghai andNanjing, but resulted in failure.

　　With the State Council proposing the ideaagain, the public is divided. Supporters believethe scheme will be an effective supplement tothe current old-age security system and willhelp soothe stresses brought by China’s agingpopulation. O thers maintain that the schemechallenges Chinese traditional beliefs and is notsuitable for China, where the real estate marketis notoriously volatile and people have only a 70-year leasehold for housing property.

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