As a flow, pensions are originated from the source of wages, and wages give birth to pensions. This thesis has analyzed the substitute relation between the increasing pensions and wages of urban employers in China, and illustrated the facts that the actual substitute ratio is decreasing rapidly, and has been lower than the nominal substitute ratio recently. Facing the important influence of the trend on the income distributing structure, value target and system arrangement of the basic old - age insurance, the author has brought up some policy proposals.