Research On The Transitional Cost Of Old-age Insurance In China

Old aging is a global tendency. Although China is still a developing country, the percentage of 60 or older in total population has already achieved 10% in 2000. Moreover, the speed goes up rapidly. It's predicted that the percentage will reach 16% in 2020 and in 2030 will be 21.4%, and 23.8% in 2040. The need of old-age pension will be 15 times of the present. "The White Wave" Impact is as fast as a sudden clap of thunder which leaves on time for covering the ears. At present, the old-age insurance in our country has shifted from foundation of collection and payment in cash in central-planned economy to the partial accumulation foundation that combines overall social planning with personal accounts (OSPPA) in the market economy. In the old system, worker's pension hadn't been accumulated in which profits were handed in the country as revenue. So the pension can be looked as a debt that government owes to the workers. When OSPPA allows the workers who are at work, establish personal accounts, and partially accumulate their pension, pension of these who have retired before the new system come into effect and those who start working in the old system but haven't retired in the new system must be fulfilled. That's the problem of the payment of the transitional cost. Because of the difference of the statistic standard, the total cost is different. But the most conservative estimate for the amount is 3000 billion yuan, which means a great pressure for government. Solving the cost is the premise of the OSPPA's effective fulfillment. So, it naturally becomes the focus of discussion. Therefore, the task our government faced is how to raise money effectively to pay for the cost. In order to solve the problem, we should assimilate the scientific ingredient and successful experience from which the foreign countries solve the transitional cost, and from a strategic point of view, reconsider how to eliminate the cost. The paper first tells us the old-age insurance system of our country from 1950 till now. Then, it uses a whole population predicted model and an age moving method to predicted the aging situation till 2040. It analyzes that our government's pressure for paying the pension become more and more great as a period of population aging peak arrives and the system changes. The second chapter uses a government-company game model to analyze the shortcoming of government and company to pay the cost. The third chapter assimilates the foreign countries' successful experience for solving the problem, and combines with the specific condition of our country, give three suggestions: 1. Use the state-owned capital to make up the gap pension. 2. Increase the age of retirement gradually. 3. Levy social security tax. In the end, I hope, through this paper, I can contribute my share to solving the problem of transitional cost during the reform of our nation's old-age insurance.