The Guangzhou government's plan to make up the social security fund shortfalls with risk reserves has aroused wide attention. The following are excerpts from media comments:

China Youth Daily: It is not a proper solution to make up fund shortfalls with risk reserves.

It is reported that Guangzhou has recovered 362.6 million (US$46.49 million) of the 1.02 billion yuan (US$130.51 million) of the social security funds siphoned off for investment and business operations in the 1990s. Another 105 million yuan (US$13.46 million) is expected to be recovered.

The municipal government will use social security risk reserves to make up the shortfall to ensure the interests of the beneficiaries if the rest 500 million yuan (US$64.1 million) cannot be recovered.

A total of more than 1 billion yuan was embezzled and the shortfall will be made up with a simple payback by the government. It seems that the interests of beneficiaries are ensured and the problem gets smoothly solved. But the fact is the risk reserves do not belong to the beneficiaries.

Every penny in the government's hands comes from taxpayers. Thus to a certain sense, to let government pay the bill means to let taxpayers pay, which almost equals letting social security fund payers pay. It is just a makeshift solution.

Of course the government's paying the bill is not meaningless. But the mode should be reflected on. The government needs to ascertain the administrative or legal responsibilities of related personnel.

There have been various social security fund cases around the country. Though there are various kinds of problems, the involved officials, including some high-level officials, were held responsible.

The Guangzhou government's shifting all responsibilities in the social security fund embezzlement case to "historical reasons" is not appropriate. The illegal behavior behind the case should be investigated.

Beijing News: We should not let government pay for the shortfalls of the social security fund.

The major reason that social security funds have frequently been put to other uses is the natural defects in the system design. As early as 1993, the former Ministry of Labor issued No 107 Document allowing a certain portion of the pension fund to be invested through State banks and investment companies.

But the implementation soon turned to chaos. The government had to put an end to the disorderly investment process. In 1994, it banned all kinds of pension fund investments. The money already invested was to be withdrawn. Then in 1997 and 1998 the government ruled that social security funds should only be deposited in banks or used to purchase national bonds. In this way billions or more in pension funds for every city were virtually devalued.

The management system of the social security fund should be reflected on. It is operated in an enclosed environment without public supervision or effective checks by related government departments.

The strict supervision of the Social Security pension fund in the United States is worth learning from. The stress is on supervision and control.

Every means is used to make the fund management transparent. Besides, the federal penal code of the United States strictly punishes embezzling pension funds and other welfare funds.

(China Daily April 6, 2007)