The central adjustment fund consists of provincial endowment insurance funds. According to 90% of the average wage of employees in each province and the number of employees who should be insured, the payment amount is calculated, and the solution ratio starts from 3% and gradually increases. The central adjustment fund is supported by income, and all the funds raised in that year are allocated to local governments. The central adjustment fund is allocated according to the per capita quota, and the amount of allocated funds is determined according to the number of retirees in each province approved by Ministry of Human Resources and Social Security and the Ministry of Finance. The central adjustment fund is an integral part of the endowment insurance fund, which is included in the financial special account of the central social security fund and is managed by two lines of revenue and expenditure. Special funds shall be used for special purposes and shall not be used to balance the budget.
Legal basis: Article 3 of the Notice of the State Council on Establishing the Central Adjustment System of the Basic Endowment Insurance Fund for Enterprise Employees.
The central adjustment fund is an integral part of the endowment insurance fund, which is included in the financial special account of the central social security fund and is managed by two lines of revenue and expenditure. Special funds shall be used for special purposes and shall not be used to balance the budget. The central adjustment fund adopts the method of advance payment, pre-allocation and liquidation, allocates funds quarterly, and conducts unified liquidation at the end of the year.
Before the implementation of the central adjustment system for endowment insurance funds, the accumulated surplus funds around the country shall be retained in principle for the adjustment of the surplus and deficiency of endowment insurance funds within the province (autonomous regions and municipalities directly under the Central Government).