| Decision of the CPC Central Committee on Some Major Issues Concerning Comprehensively Furthering the Reform pointed out: We should establish a more equitable and sustainable social security system,adhere to the principle of pension actuarial balance,and promote the reform of the endowment insurance system of employees in state organs and public institutions.O n January 14,2015,Decision of the State Council on the Reform of the Pension Insurance System for Employees of State Organs and Public Institutions(Guofa [2015] No.2)was issued and implemented,marking the formal establishment of the endowment insurance system for employees in state organs and public institutions,clarifying that state organs and public institutions will implement the basic endowment insurance system combining social pooling and individual accounts,integrating the endowment insurance system of enterprise employees in terms of the system framework,solving the long-term problem of “two-track system” for endowment insurance.The reform of the endowment insurance system of state organs and public institutions positively promotes social equity,but it is urgent to resolve its consequent financial sustainability problem.Guofa [2015] No.2 Document has divided the endowment insurance for employees of state organs and public institutions into 2 parts: the basic endowment insurance and the occupational annuity.The basic endowment insurance integrates enterprise basic endowment insurance,implementing the system combining social pooling and individual accounts.The basic endowment insurance premium is borne by the employer and the individual.Before this reform,endowment insurance for employees of state organs and public institutions was born by the government public finance,but after this reform,it has derived the occupational annuity and increased individual contributions.Therefore,after this reform,the size of the financial burden has become much concerned by the government and the community,especially against the background that C hina's economic growth has slowed down significantly,the economic downward pressure has increased,the national fiscal deficit rate has increased to 3%,corporate employee basic endowment insurance and urban and rural resident basic endowment insurance required financial support has rapidly increased for successive years.The sustained and healthy development of the social security undertakings is related to the realization of the goal of building a well-off society in a comprehensive way and the overall socialist modernization.The social insurance actuar y is the necessary technical means to promote the sustained and healthy development of the social security undertakings.It is urgent to forecast the operation and risks of the social security system in the future especially against the background of the increasing pressure of public endowment payment,and study the financial burden of state organs and public institutions with the actuarial technology.In terms of the parallelogram frame based on endowment calculation,based on the method of endowment payment for all the insured people of all ages of state organs and public institutions regulated by Guofa [2015] No.2 Document and(2015)No.28 Document issued by the Ministry of Human Resources and Social Security,this study established the endowment insurance financ ial burden actuarial model for financial full amount payer and financial difference payer,estimating the seniority pay growth rate and the annual endowment growth rate with the age through the relationship between endowments and paid wages,and the age distribution of the population,and estimated population and economic relevant parameters,and estimated government financial burden based on endowment insurance system parameters of state organs and public institutions at the beginning of the establishment of the system.Then,this study modeled the urban fertility rate and population mortality in China,extended the model to the open population,and estimated the number of insured employees of state organs and public institutions of each year since the beginning of 2015.O n this basis,this study established calculation model for the government financial burden after the endowment insurance for employees of state organs and public institutions long-term continuous operation,and in 2025 and 2035.Finally,this study analyzed the sensitivity of relevant parameters,and respectively studied the fertility rate,retirement age,market interest rate,annual wage growth rate,different institution self-contribution proportion,basic endowment insurance employer payment rate,basic endowment insurance individual contribution rate and billing interest rate,endowment growth rate,full amount employee proportion,occupational annuity individual contribution rate and occupational annuity employer contribution rate,and assessed their influence and degree on the financial burden of the endowment insurance.According to the above calculation results,this study conducted actuarial evaluation of the financial burden of the endowment insurance for employees of state organs and public institutions,and put forward suggestions for financial burden reduction and improvement of the endowment insurance system of state organs and public institutions.First of all,this study sorted research literature related to social endowment insurance calculation in detail,some of which study the relationship between the social endowment insurance system and the macro-economy,some of which study the hidden debt and the transition cost,and some of which study treatment sufficiency and financial consistency,some of which specifically study individual accounts,and others study fertility and mortality estimates.Through relevant literature sorting,this study found the endowment insurance model is endowment income and expenditure forecasting model based on the actuarial principle or the general equilibrium model commonly used in economic theory analysis.The endowment income and expenditure forecasting model predicts the future cash flow of the endowment system by establishing a quantitative rela tionship between the income and expenditure balance of the endowment system and constructs a series of evaluation systems that assess the system long and short actuarial balance to assess the solvency of the system and financial sustainability.The general equilibrium model is to apply the general equilibrium theory in economics to the evaluation of the endowment system.By establishing the general equilibrium relationship of the individual,the enterprise and the government department in a closed economy separately,the objective function and exogenous variables,the impact of changes in the endowment system and macro-economy under the steady-state equilibrium,such as the contribution rate of endowment insurance and population policy.The literature provides a rich reference to this paper,and provides guidance and direction to this study.Most of the literatures focus on the study of urban employee endowment insurance,less focus on employees of state organs and public institutions,and still less focus on financial burden of endowment insurance based on actuary.Yang Zaigui and Shi Chenxi(in 2016)measured the financial burden of the endowment of the basic endowment insurance system of enterprise employees in C hina with the future method.Yang Zaigui(in 2015)proposed a parallel quadrilateral frame for endowment estimates,achieved basic endowment insurance actuarial accrued liabilities of employees of state organs and public institutions in early 2015.But the actuarial method to calculate the financial burden of endowment insurance for employees of state organs and public institutions has not been available.Then,this study made a detailed analysis of the historical evolution of the endowment insurance system of state organs and public institutions,summarizing the reasons for the formation of the "two-track system" of the endowment insurance and the necessity of the endowment merger,described the institutional framework of the basic old-age insurance and occupational annuity after the reform of the endowment insurance system of employees of state organs and public institutions in 2015 from the scope of insurance,financing methods and payment methods.Based on whether the government finance will bear insured person endowment insurance employer contribution,the insured state organs and public institutions were further divided into two types,namely financial full contribution employer and differential payment employer.On this basis,the financial burden of the two types of employer endowment insurance was analyzed in detail.Then,based on the assumption of static population,this study applied the theory and method of calculating actuarial present value of life annuity in life insurance actuarial calculation.Based on the parallelogram frame proposed b y Yang Zaigui(in 2016),the parallel quadrilateral frame was established in the static population,established the actuarial model of the financial contribution of the endowment funds and the balance payment employer,among which,the total amount of fund s to calculate the basic endowment insurance financial burden was: full payment employer basic endowment insurance financial burden = future paid insured persons(basic endowment + transition endowment + excessive number of months individual endowment)actuarial present value at the time of the calculation.Among which,brackets were 3 kinds of financial burden of basic endowment.The reason was that the employer contribution of the basic endowment insurance employer of the full contribution employer came from the financial contribution.Therefore,the basic endowment and transition endowment payable to the insured in the future would constitute a financial burden.The basic endowment insurance individual account was paid by the individual at his own expense.If the insured person dies within the number of months,the individual account balance can be inherited.If the surviving month remains,the government would continue to pay his individual account endowment(below referred to as a single endowment).Therefore,only excessive endowment constituted a financial burden.Among which,the "transitional period person" is special and complex,need ing to examine whether the new method of endowment was lower than the old endowment and higher than the old endowment under the two kinds of financial burden calculation model selection.Case 1,if the new method of endowment was lower than that of the old way endowment,it was necessary to deal with the old way endowment deductible to pay the number of months and cope with the endowment and occupational annuity treatment after the balance of financial burden.The reason was that: First,this part of the calculation was the basic endowment insurance financial burden,and occupational annuity did not belong to the basic endowment insurance,the "transition period of human" occupational annuity financial burden would be measured separately.Second,in the number of months within the individual account endowment was the insured person own contribution to the corresponding endowment benefits,it d id not constitute a financial burden,and should also be deducted.Case II,if the new approach endowment was higher than that of the old way endowment,the financial burden of the basic endowment = old way endowment + new approach endowment higher than the old way endowment excess amount by the proportion of additional part-count payable to endowment and occupational annuity treatment.The overall iead of calculating the full payment of the employer of occupational annuity treatment of the overall financial burden: full amount employer occupational annuity employer was for in name account,it was necessary to calculate the insured persons ar various ages in future residual payment period conditions,the annual employer payment should be in accordance with the national unified announcement of the billing rate accumulated to the retirement point to get the total amount of the accumulated,and then the amount of the factor discounted to the estimated point of time,available in early 2015 the full contribution of the employer occupational annuity,namely the actuarial present value of the contribution,that is,the financial burden of the full contribution of the occupational annuity.Different contributor endowment insurance contribution should be borne by the employer and the finance.The financial burden of the basic endowment insurance should deduct the actuarial present value of the employer own contribution on the basis of the financial burden of the full contribution employer.The overall idea of the calculation of the difference between the employer payment of occupational annuity treatment of the overall financial burden: the balance of employers of the occupational annuity payment should implement the accumulation of real account,t he accumulation of the formation of occupational annuity funds should implement market-oriented investment operations,according to the actual income interest the difference between the contribution of the contribution employer should be only a part of the financial burden borne by the government.At the beginning of 2015,the financial burden of the occupational annuity was the actuarial payment of the future employer payable by all the participants in the occupational annuity value.Then,the model was extended to the open population,and applying Lee-Carter model to model the mortality rate of the urban population in C hina.The fertility rate was modeled with the relevant theory of fertility estimation.According to the reality that C hina's total fertilit y rate is generally under-estimated,and the normalized fertility rate was adjusted according to the yearbook.On this basis,the use of population shift algorithm was estimated from the beginning of 2015 the future of the annual state organs and public institutions of the insured population structure,on the basis of the establishment of the open population under the assumption that the state organs and public institutions of endowment insurance in early 2025 and early 2035 fiscal actuarial model.Finally,according to the provisions of the new system of endowment insurance institutions and the new situation of C hina's economic development,the relevant parameters and assumptions required for the model were calibrated.On the basis of this,the study reported the financial burden of the endowment insurance of state organs and public institutions at the beginning of the establishment and the future years,and examined the financial contribution of the employer to the retirement age,the total fertility rate,and the basic endowment insurance and the individual contribution rate,the employer payment rate of the occupational annuity and the individual contribution rate,the endowment insurance accounting interest rate,the market interest rate,the annual wage growth rate,the endowment growth rate and the difference between the employer contribution rate and the average self-constribution.Sensitivity analysis found: the basic endowment financial burden and retirement age,market interest rate,the basic endowment insurance employer contribution rate and the difference between the employer's self-contribution proportion witnessed reverse changes;and the total fertility rate,wage growth rate,endowment growth rate proportion of employers,basic endowment insurance individual contribution rate,billing rate and occupational annuity individual and employer payment rate changed in the positive direction.The financial burden of the occupational annuity and the market interest rate,the proportion of the full amount of employers and the proportion of the average employer of self-contribution proportion witnessed reverse changes;and the total fertility rate,retirement age,wage growth rate,billing rates and occupational annuity employers,endowment growth rate,the basic endowment insurance individual and employer payment rate,billing rate and individual endowment rate were not related.The overall financial burden of the endowment insurance institutions and the retirement age,market interest rate,the basic end owment insurance employer payment rate and the difference between the employer self-contribution proportion witnessed reverse changes;and other factors were in the positive direction.In general,the financial burden was more sensitive to aggregate fertility,retirement age,market interest rates and wage growth rate.Against the background that C hina's economic growth has slowed down significantly,the economic downward pressure has increased,the national fiscal deficit rate has increased to 3%,corporate employee basic endowment insurance and urban and rural resident basic endowment insurance required financial support has rapidly increased for successive years,to reduce the integrated financial burden of the endowment insurance for employees of state organs and public institutions,in combination with the results of sensitivity analysis,this study presents the following policy suggestions:First,the liberalization of population policy should be cautious.Although the release of population policy is co nducive to the release of reproductive potential,alleviat ion the aging population pressure,increasing labor supply,promoting balanced population development,the total fertility rate increase will increase the financial burden of the endowment insurance for employees of state organs and public institutions.And the results of the sensitivity analysis show that the total fertility rate has the most significant impact on the financial burden,so the future population policy should be cautious,and the demo graphic dividend is a long-term effect,and the new population will not bring dividends immediately,conversion into labor needs 15 or more years.Second,it is necessary to promptly introduce the progressively delayed retirement policy.Delayed retirement will extend the discretionary payment period of the difference contribution employers,shorten the endowment payment period,and reduce the elderly population support ratio,thereby reducing the financial burden of the basic endowment insurance for employees of state organs and public institutions.However,the delay in retirement will extend the payment period of occupational annuity contributed by the government,increasing the financial burden of the occupational annuity.However,since the scale of the basic endowment insurance is much higher than the size of the occupational annuity,from the overall point of view,delay in retirement can still reduce the overall burden of endowment insurance for employees of state organs and public institutions.Third,it is necessary to improve the basic endowment and occupational annuity investment rate of return.Either financial burden of the basic endowment or the financial burden of the occupational annuity,witnesses reverse change for the return on investment a nd the absolute value of the elasticity is less than the total fertility rate and the retirement age,which indicates the impact of the return on investment on the financial burden is significant,so improving the investment rate of endowment funds will reduce the financial burden for employees of state organs and public institutions,serving as a financial security effective measure.Fourth,it is necessary to realize basic endowment national co-ordination and appropriately reduce the employer contribution rate.The implementation of national co-ordination can further expand the scope of endowment insurance fund swap,and gradually change the regional endowment fund income and expenditure balance,improve the affordability of funds and fund application efficiency.After the implementation of the endowment national co-ordination,in order to appropriately reduce the employer endowment insurance rate and provide favorable conditions,appropriate reduction of the employer contribution rate will not lead to reduction of retirement endowment benefits.The sensitivity analysis shows that the basic endowment insurance employer contribution rate reserve impact on the financial burden is far less than that of the retirement age.If the delayed retirement policy can be introduced in a timely manner,even if the employer contribution rate deceases current 20%,the financial burden will not be increased,which is consistent with the current tariff reduction policy trends and social expectations.Fifth,it is necessary to establish a rational wage and endowment adjustment mechanism,approximately increasing the proportion of self-contribution.The financial burden is sensitive and positively affected by the wage growth and endowment growth rates.Future adjustment of wage and endowment needs to take into account the new situation of economic development and the aging of the population,and establish an adjustment mechanism matching the national economic development,financial conditions and price changes.It is necessary to increase the proportion of the average employer self-contribution,and reduce basic employer financial insurance and financial burden of occupational annuity,and reduce the overall financial burden for employees of state organs and public institutions.Therefore,it is necessary to further clarify the functions,distinguish public welfare employers and profit employers,making the latter separate from state organs and public institutions and enter the business circles.And the public institutions should increase difference contributor own self-improvement functions.Sixth,it is necessary to establish a long-term actuarial assessment mechanism for social insurance funds to adapt to changes in population structure.Considering the rapid development trend of China's aging population,to ensure long-term financial sustainability,China should establish the long-term actuarial evaluation mechanism of social insurance funds as soon as possible.The evaluation should include social insurance actuarial technology application methods,the future financial performance system predict ion and assessment,developing or adjusting policies to simulate assessment on the impact of the future system and assess financial subsidy needs,fund operation risk s and fund management efficiency.At the same time,it is necessary to establish the social insurance actuarial reporting system.This paper has the following 3 innovations:First,the previous study on C hina's social endowment insurance with the actuarial method mainly focused on the basic endowment insurance for employees of urban enterprises,and study on the endowment insurance for employees of state organs and public institutions was very rare,and the study on the financial burden of endowment insurance for employees of state organs and public institutions was still blank.This study focused on the overall financial burden of the basic endowment insurance for employees of state organs and public institutions including the financial burden of the basic endowment insurance and occupational annuity,and the former included pooling account financial burden and individual account,and the two had their calculation models significantly different from each other,which shows the financial burden calculation model of the endowment insurance for employees of state organs and public institutions is far complex than the basic endowment insurance of enterprise employees.Second,more importantly,previous studies d id not involve or take into account the endowment payment methods applicable to the insured population of different ages stipulated in(2015)No.28 Document issued by the Ministry of Human Resources and Social Security.According to the document,in case the treatment based on the new method(including occupational annuity treatment)is lower than that based on the old method,the latter shall prevail.In case the treatment based on the new method is higher than that based on the old method,the excess part in the first year shall be paid to the retired employees by 10%,in the second year by 20%,and so on and so forth,at the end of the transition period by 100%.Those who retired after the transition period shall implement the new method.According to Guofa [2015] No.2 Document,the employee began working before the implementation of this decision,and retired after the implementation of this decision and had his accumulated contribution period(including the equivalent payment period)over 15 years,shall implement the rational convergence and smooth transition principles,obtaining basic endowment and individual account endowment,and the transitional endowment based on contribution period,which should be based on by the calculation of the financial burden of endowment insurance for employees of state organs and public institutions.In terms of “transition period” endowment calculation,the employee who began working before October 1,2014(referred to before the reform),and retired after the reform,shall implement a 10-year transition period,and shall implement both new and old treatment methods in the transition period,whichever is higher,greatly increasing the complexity of the calculation technology.Third,The models of the existing literatures on studing the basic old-age insurance are not inclusive,however,this paper uses quantative methods:including the Lee-Carter model to model the mortality rate of the urban population in C hina.The fertility rate was modeled with the relevant theory of fertility estimation.The framework can also apply to other types of insurance. |
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