Since there are many differences among different provinces in the level, coverage, pension tax rate and subst itute rate of insurance for the elderly. There is huge cost in the transition from Province-centered Elderly Insurance Planning to a State-centered One. To achieve such a goal, it is necessary to find proper routes to reduce transition cost as well as to strengthen the stability of the system. It may be considered to divide pension fund system into two parts: national pension fund system and local pension fund system, with the former as the major one and the latter as the minor one. It also should be considered that central government and local government should be well aware of the duties of each other in the implementation of the new policy to balance the interests of different provinces.
