Research On The Sustainability Of Basic Pension System For Urban And Rural Residents

In accordance with the relevant provisions of the Social Insurance Law of the People's Republic of China and based on summarizing the pilot experience of the New Rural Pension System(NRPS)and the Pension System for Urban Residents(PSUR),the Basic Pension System for Urban and Rural Residents(BPSURR)was established by merging NRPS and PSUR in 2014.The goal of BPSURR is to provide basic living security for urban and rural residents who are not covered by the Basic Pension System(BPS)and employed by government institution and public institution,aged 16 or above(excluding students in school).Not only the BPSURR fills in the gaps in the implementation scope of China's Basic Pension System,but also has very important theoretical and practical significance.First,the current institutional model of the Basic Pension System for Office StafFs(BPSOS),BCPS and BPSURR is unified.The combination of social pooling and individual accounts has realized the effective connection of the three basic pension systems.Second,BPSURR creatively adopts a non-contributory financing model different from BPSOS and BCPS,and uses fiscal subsidies at all levels of government as the sole source of funding for basic pensions and has greatly mobilized the enthusiasm of urban and rural residents.Third,the adoption of the "non-contributory" financing model not only clarifies that social insurance is the basic right of citizens,but also indicates that the National Pension System will be the future development trend of the unified basic pension system in China.However,it must be noted that as a non-contributory pension system,the expenditure level of public fiscal for BPSURR will not only directly affect the sustainability of BPSURR,but also the sustainability of public fiscal.Based on this,this thesis simulates the various variables affecting the scale of public fiscal expenditure under different policy objectives and their impact on the scale of expenditure through calculation the scale and the rate of public fiscal expenditure on BPSURR.And then,this thesis simulates and improves the operating mechanisms of BPSURR including the participating mechanism,contribution mechanism,pension adjustment mechanism and longevity risk control mechanism in order to ensure the sustainability of public fiscal expenditure,and provides scientific and feasible suggests for the improvement of BPSURR.In terms of qualitative research,this thesis completely sorts out the theoretical basis of BPSURR and analyzes the current status and existing problems of BPSURR:On the one hand,this thesis divides the theoretical basis of BPSURR into two types:system theory and sustainability theory.The system theory of BPSURR is mainly analyzed from three aspects:public pension theory,non-contributory pension theory and fully fund pension theory.The sustainability theory of BPSURR is mainly sorted out from solvency theory,the sustainability theory of pension system and the sustainability theory of public fiscal expenditures.On the other hand,through the comparative study with NRPS,PSUR and BPS,this thesis summarizes the seven characteristics of BPSURR,then analyzes the current implementation from the aspects of the number of participants,the choice of payment grade,the number of people receiving benefits,the level of per capita pension,the status of fund income and expenditure,the setting of the organization and the fiscal subsidy.This thesis finds that the following problems occur in the operation of BPSURR:the participation rate is low and tends to be insured at a lower level,accumulation of individual account fund is insufficient,funds are difficult to maintain and increase value,pension replacement rate is low and growth is slow,the gap between the payment levels of different basic pension systems is obvious and the convergence mechanism needs to be improved,the social pooling level is low,the welfare is strong and the insurance is weak,the regional unfairness,and the fiscal subsidy incentive effect is limited.In terms of quantitative research,by constructing actuarial model and population prediction model of BPSURR,this thesis conducts empirical research from three aspects:the fiscal expenditure on BPSURR,the impact of fiscal subsidy model on fiscal burden level and average pension replacement rate,and the impact of BPSURR's operating mechanism on fiscal burden level and average pension replacement rate.First of all,according to the data of the fifth census in 2000 and the sixth census in 2010 and the national 1%population sample survey data of 2005 and 2015,this thesis compiles the national life table of men,women and comprehensive urban and rural residents,and then simulates the scale and flexibility of public fiscal expenditure under the current policy from the individual and overall perspectives of urban and rural residents.The forecast results show that:first,under different payment grades,there is a fund gap in individual accounts for both men and women,and with the increase of payment grades,the size of the fund gap is also expanding;second,from the perspective of flexibility,when choosing the 600 yuan payment grade,the growth flexibility of the individual account fund gap is the smallest(0.92),that is,the minimum increase in the fund gap caused by the increase of 1 yuan in the payment grade is the lowest,the "price ratio" is the highest;third,taking into account the individual account subsidies and basic pension subsidies of the local and central governments,with the increase in the payment grades,the total fiscal burden of the forecast period(2014-2058)continues to increase.Furthermore,based on the current policy and by calculating the pension value,this thesis establishes the relationship between the pension fiscal burden(pension fiscal expenditure/fiscal revenue)and the average pension replacement rate,and observes their dynamic change process by adjusting the fiscal subsidy model.Research findings:First,the scale of central fiscal subsidies will increase from 2014 to 2020,and the central fiscal burden will fluctuate within the range of 2.5%to 2.8%;according to the local fiscal support capacity of the 30-60 yuan payment subsidy,the local fiscal burden is between 0.4%and 0.6%in the same period.The overall fiscal burden of the central and local governments is between 1.35%and 1.60%,with an average of 1.47%.Second,when individual chooses 100 yuan payment grade,and local fiscal subsidy for individual account is 30 yuan,"standard person" individual account pension is 796 yuan/year,and basic pension replacement rate is stable in 7%or so.Third,taking 2018 as an example,from the individual perspective,the subsidy of 30 yuan/year is in a highly elastic range,and the pension replacement rate elasticity of individual account fund gap of "standard person",male and female is 30.37,26.15 and 36.32 respectively;from the overall perspective,the elasticity of pension replacement rate of fiscal burden decreases with the increase of individual account contribution subsidy,and gradually tends to be flat when the contribution subsidy reaches about 300 yuan.In theory,the individual account contribution subsidy reaches 476 yuan/year,while the basic pension subsidy is 0,the elasticity within the feasible region reaches the minimum,otherwise it means the fiscal burden level increases significantly.Therefore,the adjustment of fiscal subsidy model must consider the fiscal affordability.Finally,through the appropriate adjustment of the participating mechanism,contribution mechanism,pension adjustment mechanism and longevity risk control mechanism of BPSURR,this thesis simulates their impact on the fiscal burden level and average replacement rate,and analyses the changes between the fiscal burden level and average replacement rate.In terms of the participating mechanism,the starting age of participating in BPSURR can remain unchanged at the age of 16,that is,you can join BPSURR after receiving 9-year obligation education.The retire age should be in line with BCPS 's deferred retirement policy.The contribution density should be encouraged properly,but be no need the focus of the construction and development of BPSURR.In terms of the contribution mechanism,this thesis proves that when choosing the 600 yuan payment grade,the growth flexibility of the individual account fund gap is the smallest,so it can be regarded as the highest cost-performance level.When the individual account contribution subsidy reaches about 300 yuan,the pension contribution rate elasticity of the fiscal burden level gradually decreases with the increase of the individual account contribution amount will become flat,thus becoming the most cost-effective fiscal subsidy mode.In terms of the pension adjustment mechanism,this thesis thinks that the current adjustment level of consumer price index and BCPS(down to 5.5%in 2018)is more appropriate and feasible.The cash flow of individual account pension in each year only needs to be adjusted to be consistent with standard pension in the year of retirement according to the actuarial present value of pension.In terms of the longevity risk control mechanism,this thesis believes that when the payment of individual account fund is exhausted,individual account pension should be ceased.When residents who had participated BPSURR die before reaching retire age,their designated beneficiary or statutory successors can inherit the fund asset of individual contribution in individual account,but local government's subsidy should be deducted from it and be used to enrich the social pooling accout.In conclusion,on the basis of summarizing the conclusion of quantitative research on BPSURR,and combining with the qualitative research on BPSURR,this thesis puts forward some policy suggestions for further improving BPSURR in China.