Study On The Level Of Fiscal Payment For New Rural Social Old-age Pension In China

Old-age pension is a system founded for relieving the burden of retired labors and other unemployed members of the society. Compared to relatively perfect urban old-age pension, the rural old-age pension system has been lagged far behind, and the differences between urban and rural on old-age pension are more obvious than which of economy to some extent. Facing the actual status of accelerated aging progress in rural areas, establishing a wide coverage rural social old-age pension system would be imperative and urgent.Rural old-age pension system of China has entered a new phase of progress, symbolized by the national new rural pension pilot institution in September 2009. New rural old-age pension is a complex system, including economy, population and other social factors, which, in the process of establishment and improvement, needs further studies. Responsibility of government on the establishment of new rural pension and its sustainable development is very important on social insurance attributes, as well as on the practical rural population income and consumption condition. The responsibility involves legislative guarantee, institutional design, financial support, supervision and management, etc. Financial support is the core and trait of new rural old-age pension, and the symbol of improving its institutional establishment from national and governmental level.There are many factors that affect the implementation of government financial support, the most important of which is setting an appropriate standard for rural pension. To protecting the basic living needs for rural residents that beneath the moderate standard of living is the bottom line of fiscal responsibility. Gradually approaching to upper standard of a decent life, narrowing or even eliminating "welfare gap" between urban and rural social dualistic security is inevitable. We must keep dynamic balance between moderate living standard and the level of fiscal payment. At the same time, institutional model, including financing structure, prestation structure, welfare arrangement, overall plan arrangement, institutional coefficients, charging level, etc, is directly affect the fiscal payment. Besides, different fiscal sharing mechanism at all levels in the institutional model results in different of rationality for the fiscal payment. Therefore, the study on the level of fiscal payment for new rural old-age pension and its influence factors as institutional model and parameters are of great theoretical practical significance.The study is logically based on the central and local (including three different areas: eastern, middle and western areas, with respectively different economical types) funding ability after thoroughly implementing new social rural old-age pension, as well as its changes and reasonable degree in the next forty years. On that basis, it constructs the consensus mode of new rural social old-age pension, which is characterized by approaching the appropriate standard, realizing the prestation structure of“triple accounts”, establishing adaptive adjusting mechanism for prestation level and reasonably adjusting payment level for rural residents. For the new social rural old-age pension while the pilot is proceeding, it will solve the profound problems including short of payment, unreasonable central and local fiscal payment, lack of adaptive adjustment mechanism, deficient fiscal funds insurance mechanism, low overall planning grade and institutional obstacle of overall planning transformation in different areas. Furthermore, by calculating and analyzing the central and local funding ability, and its changes and reasonable degree in the next forty years in the appropriate standard of old-age pension of consensus mode, the fiscal feasibility, the rationality of payment and the sustainability of institution will be checked.This paper focuses on the following four aspects:1. Study on the theoretical basis for the establishment and improvement of new rural pension institution and fiscal payment. According to Rawls’theory of distributive justice and economic“Price Scissors”compensation theory, the compensation theory of rural old-age pension insurance is put forward. At the same time, the paper expounds the necessity and urgency of new rural pension institution establishment supported by the negative impacts of social equitableness, justice and welfare without rural old-age pension institution and narrowing“welfare gap”of urban and rural dualistic social security. By the principle of“living fair”and“working fair”, the paper sets the moderate welfare level of new rural pension, and brings forward the theory of government responsibility and fiscal sharing, which support the constitution of fiscal investment institution, fiscal sharing institution, and fiscal assurance institution as theory basis.2. Study on the present new rural social old-age pension institution and the characteristics of its fiscal payment (including the structure of payment, sharing mechanism and the payment level). By analyzing the new challenges brought by the traditional way to self-insurance of rural seniors like intergeneration raising and agriculture insurance, it concludes that the government should develop rural old-age pension energetically. And by analyzing the limitation of“formerly rural pension”in the last century, the conclusion is that the government must become the supporter and leader of fiscal investment. Whereas the institutional model influences fiscal payment structure, sharing institution and payment levels, this paper analyzes the frame of the present new rural pension institution, corresponding fiscal payment features and the influence factors. After that, by calculating fiscal payment for the next forty years based on new rural old-age security pilot mode and analyzing the aging factors, the uneven economic development and the division of fiscal responsibilities between central and local government, the strategies have been made for advancing the pilot mode. The points above provide theoretical and practical basis for fiscal operating evaluation of new rural pension pilot and the construction of consensus mode.3. Discussion of building the consensus mode of new old-age pension institution. There are some problems and deficiencies of new pilot mode in some aspects as financial supporting capacity, financial assurance mechanisms, division of fiscal responsibilities, pension benefit level that affects fiscal payment and dynamic adjustment mechanisms. Therefore, after in-depth analysis, the paper proposes the subject for further improving and optimizing. It analyzes the goal of constructing consensus mode of new rural pension from 6 aspects: moderate rural residents pension level,“triple accounts”mode establishment, dynamic adjusting mechanism of payment, rudimental elimination of differences between urban and rural old-age pension in 2050, equal pension standard in eastern, western, and middle area of China, and suitable capacity for rural consumption. This paper has established the“Triple accounts”payment structure with national, local and personal accounts, which founds the main frame of new rural pension. It also explains the basic functions and operating principle of local payment. Meanwhile, this paper studies the feasibility of rural residents’payment adjustments and designs a scheme for that. It aims at promoting the pension degree of personal accounts and accordingly reducing the fiscal payment by increasing the payment of rural residents in the range of their affordable income.4. Calculation of fiscal payment level based on new rural pension consensus mode. The analysis is to confirm the low and high range of moderate rural pension standard, including both static and dynamic ones. This paper clarified that central government take the responsibilities of“basic insurance”by uniform national basic pension and local governments focuses on local economic development, gradually increasing the level of pension benefits to approaching moderate high range. It measures and analyzes fiscal payment level of basic old-age pension for the next 40 years from two aspects: achieving low range of moderate pension standard and dynamic adjustment mechanism with linkage of Engel’s coefficient and price index. Finally, in the view of different demand of high range of local moderate pension, it calculates and analyzes the local fiscal payment for personal allowance compensation of the governments in eastern, middle, and western area, and evaluates the rationality and sustainability of fiscal payment.Based on the studies above, this paper proposes some suggestion on reasonable fiscal payment in new rural pension construction. First, clarify the responsibilities of local government of all levels on new rural old-age pension institutional establishment and sustainable development, positively enhancing institutional innovation on provincial planning, consuming grade adjustment, and local promoting pension pilot; Second, achieve dynamic balance between new rural moderate pension standard and fiscal payment by focusing on sharing property of social economic development and urban-rural“welfare gap”of dualistic social security; Third, cogently playing the subject position of central and provincial fiscal function on new rural pension construction; Forth, raise funds through multiple channels while speeding up the transformation to public finance; The last but not the least, achieve complete financial assurance mechanism of new rural old-age pension institution.