Research On The Structural Optimization Of China's Multi-pillar Pension System

At present,China's urban social pension system is facing severe sustainable development issues.According to the forecast,without considering government fiscal subsidies,balance of basic endowment insurance fund for enterprise employees was-256.15 billion yuan in 2018 and will reach-533.58 billion yuan by 2022 and will continue to expand thereafter.The reason is not only that China's economic growth has slowed down under “the new situation” and that the ageing of the population is increasing,but that China's urban employees are mainly dependent on the first pillar(basic pension system for urban workers)and the development of the second pillar(occupational pension system)and the third pillar(private pension system)seriously lag behind.Therefore,the in-depth exploration of the optimization of China's multi-pillar pension structure is of great practical significance for the sustainable development of China's pension system.The construction of the multi-pillar pension system has become the consensus of the academic community.However,there are still some major issues worthy of in-depth exploration and thinking.For example,what is the advantage of the multi-pillar pension system compared with the single-pillar pension system? How can “multi-pillar” make the pension system more sustainable? Why is China's multi-pillar pension system still seriously imbalance after more than 20 years of development? And how should China optimize the development of multi-pillar pensions? This thesis attempts to explore the above issues in depth.First,this thesis,basing on theoretical analysis,mainly explains the advantages of the multi-pillar pension system:(1)exploring the significant value of individual(negative)freedom and then extending it to the protection of individual freedom,the boundaries of government's powers and the space in which the market should play a role,which constitute the theoretical basis of the rights(authorities)and responsibilities of the individual,government,and market in the field of old-age security.In this regard,the single-pillar pension system cannot fully balance the rights and responsibilities of different subjects in the old-age security,which can be balanced by the multi-pillar pension system and futher the role of all parties in the pension security can be fully realized.(2)Through the definition and analysis of fairness and efficiency,based on the “baseline fairness” connotation,everyone should be ensured to have basic survival guarantees;based on the connotation of efficiency,each individual's rights and obligations in the field of pension security should be equal.Therefore,the multi-pillar pension system can work together to coordinate the above two.In addition,the construction of a multi-pillar pension system also helps to optimize the combination of different old-age security models,thereby improving efficiency.Second,this thesis makes an in-depth analysis on the structural reform of OECD pension system,which reveals how “multi-pillar” can make the pension system sustainable.Overall,pension reform in most OECD countries cut the government's power and burdens in the field of pensions and OECD,through developing the private pension,guide individuals and markets to fully play their roles in the field of pensions.Also,OECD achieve the goal of balancing baseline fairness and efficiency by the adjustment of the pension security goals,functions,and security models within the same pillar or between different pillars.It shows that only by fully and properly playing the roles of different responsible parties in endowment insurance and rationally designing the security goals and functions of different pension pillars can reflect the advantages of multi-pillar pensions and the pension system will be more sustainable.Meanwhile,combining the OECD reform practice and the current situation of China's pension system,the revelation is that China should give full play to the personal self-protection responsibility and the safeguard role of the market mechanism in the multi-pillar pension structural reform and focus on the optimal combination of different security objectives and functions and the baseline protection for impoverished senior citizens.Third,through the exploration of the multi-pillar pension structure in China,it is found that there are serious structural imbalance.The reasons are as follows: China's planned economy and the original national insurance system caused negative effects;target orientation of economic development and policy options of the pension system reform brought some drawbacks;related laws and regulations such as tax breaks for private pensions lagged behind and powers and responsibilities of the government in pension system were imbalance.And structural imbalances have brought a series of consequences,such as structural imbalances result in poor fairness and sustainability of pension system and individual freedom has been eroded,individual responsibilities for self security have not been given full play,and the role of market mechanisms has been limited.Fourth,based on the empirical studies and related calculations,this thesis puts forward the reform plan of public pension.According to the calculations on the largest corporate social insurance contributions,it is found that the current corporate social insurance total contribution rate has constrained the development of private pension to some extent.Therefore,based on the perspective of multi-pillar pension structure optimization,endowment insurance contribution rate needs to be reduced.However,due to the lack of private pension,people worry that reducing public pension contribution rate will lead to a decline in the benefits of retirees.For this,the thesis makes a comparative analysis of pension return rate based on scenario analysis and different assumptions of pension scheme.The results show that through the implementation of the "small society pooling + large personal account" system model,enterprises have a large space to reduce fees.Meanwhile,it will not reduce the pension income of retirees.The reason is that the new system model makes pension property rights more explicit by closely linking contribution and retirement income,which,to a certain extent,will make reducing corporate contribution rate can be compensated by improving the compliance rate of public pension.It also gradually makes enterprises “false high contribution rate” back to the right track.Fifth,this thesis also demonstrates the feasibility of developing private pension in China.Based on the empirical data,it is found that most of the residents have the financial foundation to participate in the private pension.At the same time,through project assumptions and scenario simulations to predict the total interest of the retirement savings account for the representative individuals at the time of retirement,it is found that the individual pension plan has a higher return than the same amount of bank savings deposits with the same contribution period.Sixth,this thesis proposes an overall reform plan for the multi-pillar pension system: for the first fillar,the basic social pension should adopt “small social pooling + nominal individual account”,supplemented by old-age safety net;for the second pillar,the goverments should actively encourage enterprises to use the reduced part of corporates' basic social pension contributions to establish corporate annuities;for the third pillar,a preliminary plan for the development of private pension is proposed.At the same time,this thesis also puts forward relevant policy recommendations for the reform and development of public and private pensions.