China’s national pension fund is likely to be depleted by 2035 amid a widening disparity among regional funds, according to a state-sponsored research institute.

In a report released Wednesday, the Chinese Academy of Social Sciences forecast that the savings in the pension fund will peak at 6.99 trillion yuan ($1.04 trillion) in 2027, followed by a sharp decline in subsequent years. While the country’s pension system is “sustainable” at the national level, it said, the disparity of funds at provincial and regional levels is leading to a growing “imbalance.”

For example, Guangdong province’s pension fund sits at 200 billion yuan — nearly the same as the combined balance of the pension funds for nine other provinces. In July of last year, China introduced a central adjustment system requiring richer provinces to pay for retirees residing in worse-off neighboring areas in an effort to mitigate regional differences.

The national pool of pension funds amounts to 106.29 billion yuan — a figure that’s likely to rise with the country’s aging population, according to the academy. The government estimates that the number of people aged 60 and above is expected to reach 400 million by 2033 and peak at 487 million in 2050. (Image: VCG)