Research On The Financial Sustainability Of Basic Old-age Insurance System For Urban And Rural Residents

In 2014,a new type of old-age insurance for rural residents and urban residents' social oldage insurance were merged into the basic old-age insurance for urban and rural residents,expanding the coverage of the social insurance system,and bringing more people into the system of old-age insurance.The report of the eighteen National Congress of the Communist Party of China and the report of the nineteen National Congress of the Communist Party of China also proposed to build a "sustainable multi-level social security system" in an all-round way.The financial sustainability of the basic old-age insurance system for urban and rural residents is not only related to the government's credit,but also affects the well-being and social stability of hundreds of millions of people.Therefore,based on the guiding opinions on the basic old-age insurance system for urban and rural residents issued by the State Council and the Ministry of human resources and social security,this paper studies the financial sustainability of the basic old-age insurance system for urban and rural residents.The purpose of the study is which(1)provides a method system for the financial sustainability evaluation of urban and rural residents' insurance system,and a quantitative analysis tool for the scientific evaluation of the financial sustainability of urban and rural residents' insurance system;(2)provides experience support and strategic reference for the government to make targeted policy adjustment and maintain policy sustainability;(3)maintains the rights and interests of the insured and social stability,it has important practical significance for the promotion of urban and rural residential old-age insurance work and system improvement.This paper studies the related literature of basic old-age insurance at home and abroad through the literature analysis method.Based on the relevant documents issued by the State Council on the establishment of a unified basic old-age insurance system for urban and rural residents,this paper makes a theoretical analysis on the income and expenditure of urban and rural residents' basic old-age insurance,and the financing mode of the overall account and individual account.The urban and rural residents are divided into 16-59 year-old payers and 60year-old and above recipients.On this basis,the social security statistics and actuarial technology are used to build the urban and rural residents' financial security capacity calculation model and personal account payment gap model.The quantitative method is used to study the population,policy and economic parameters set by these two models.Through the research results of these two models and related parameters,the paper empirically analyzes the amount of financial subsidies for urban and rural residential old-age insurance and their proportion in the national financial revenue,and then evaluates the financial sustainability of urban and rural residential old-age insurance system,and quantifies the relevant influencing factors analysis,as follows:First of all,we do quantitative research on the insured population of basic old-age insurance for urban and rural residents.We mainly use statistical analysis and econometric analysis to analyze and predict the mortality of China's population through the random mortality model LC coherent model and CBD model.We found that the mortality rate of China's population is improving year by year,and the life expectancy of the population is increasing.Based on the life expectancy of the population,it is assumed that the mortality rate converges to the level of 2029.We mainly use statistical analysis and econometric analysis to analyze and predict the fertility rate of Chinese fertile women through the random fertility rate model LC model.We found that the fertility level in China generally shows a downward trend within the sample range,the lowest value in 2015,and the fertility level in the following years slightly rises,so It is assumed that the fertility level will remain unchanged in 2020.We predict the total participated rate of the future payers by using the statistical analysis method and the grey GM(1,1)model.The results of model calculation reveal that by 2028,all the people who meet the conditions of urban and rural residents' old-age insurance can participate in the insurance;the population who meet the conditions of urban and rural residents' old-age insurance has been basically covered by urban and rural residents' old-age insurance;as time goes on,the age of the representatives of the insured gradually decreases.Based on the analysis of the mortality rate,fertility rate and insurance rate of the three main factors affecting the population participating in the basic old-age insurance for urban and rural residents,and the national population data of 2017 as the basic year data,combined with the population balance equation,this paper predicts the number of participating in the basic old-age insurance of urban and rural residents in 2018-2056.The results show that the life expectancy of urban and rural residents in China will be extended year by year,and the population will be aged day by day;the fertility level will be rebounded after 2015,but it still shows a downward trend;the participation rate of old-age insurance will increase year by year;the number of contributors aged 16-59 participating in the basic old-age insurance for urban and rural residents will rise first and then decline,and reach a peak in 2028;the number of people aged 60 and above receiving pension has been increasing trend;The number of people receiving pension will exceed the number of contributors in 2051 year.The aging trend of urban and rural basic old-age insurance insured population will bring certain pressure to government financial expenditure.Secondly,this paper makes a quantitative analysis of policy parameters and related economic parameters in the basic old-age insurance for urban and rural residents.The policy parameters include the analysis of the minimum standard of basic pension,the calculation of per capita individual payment of urban and rural residents,the calculation of per capita individual payment subsidy standard and growth rate of local government.The economic parameters include the analysis of the accounting interest rate of the individual accounts of urban and rural residents,the analysis of the per capita disposable income of the rural residents,and the analysis of the fiscal revenue and GDP.Finally,we have calculated the amount for financial subsidies in urban and rural residential old-age insurance to use actuarial method.According to the financial security capacity model and individual account payment gap model constructed in Chapter 2,combined with the calculation results of relevant parameters in the model,calculated respectively the basic pension paid by the government in 2018-2056,the total annual subsidy paid by the government to the individual per capita in 2018-2056,and the annual gap amount of individual account payment in 2022-2056.The results show that the three aspects are increasing with time.In 2018-2056 year,he proportion of the basic pension paid by the government to the financial subsidy of urban and rural residents' endowment insurance is between 93.4% and 96.0%,the proportion of annual gap of individual account payment to the financial subsidy for urban and rural residential old-age insurance is between 0.1% and 4.0% after 2022,and the proportion of the total annual subsidy paid by the government to the individual per capita to the financial subsidy for urban and rural residential old-age insurance is between 0.6% and 5.7%.The research shows that the government's financial subsidies for urban and rural residential old-age insurance in2018-2056 are mainly used for basic pension subsidies.Using the comparative analysis method,we find that the proportion is far less than that of OECD countries' pension expenditure in fiscal expenditure or GDP.According to this analysis,If China's economy continues to develop steadily,the basic old-age insurance system for urban and rural residents should be financially sustainable.Through the quantitative research on the factors that affect the financial sustainability of urban and rural residents' old-age insurance system,it is found that the increase of any one of factor will increase the total amount of government financial subsidies for urban and rural residents' old-age insurance,such as basic pension and growth rate,government subsidies and growth rate for individual contributions,individual contributions,individual account accounting interest rate,mortality rate,etc.but increasing the age of receiving treatment and extending the amortization month will reduce the total amount of financial subsidies for basic old-age insurance for urban and rural residents.The impact of fertility rate on population structure can only be reflected in a long period of time.In the prediction period of this paper,its impact is not obvious.However,if fertility rate is increased,it is expected that with the increase of young population,the total amount of government financial subsidies for basic oldage insurance for urban and rural residents will decrease in the future.Generally speaking,the most important factor affecting the financial sustainability of the basic old-age insurance system for urban and rural residents is whether the government's financial subsidies can be fully in place.If the government's financial subsidies for urban and rural residents can be timely released and in place in full,then the urban and rural residents' insurance system is financially sustainable.Generally speaking,the treatment adequacy of pension system is one of the important conditions to measure the long-term sustainability of pension system.Therefore,based on the actuarial theory,according to the existing or non-existing individual account of urban and rural residential old-age insurance,the replacement rate model of basic pension account of urban and rural residents,the replacement rate model of personal account pension and the total replacement rate model are constructed.Through the adjustment of key parameters,empirical analysis of total replacement rate and its changes,the study found that: in 2014,the level of total replacement rate was 9.81% for the elderly aged 60 and over who did not have an individual account;the highest level of total replacement rate was 32.43% for the insured with an individual account under different parameter combinations.Considering the supplementary payment of the insured,the total replacement rate of the urban and rural residents' pension shows a trend of first decreasing and then increasing with the increase of the insured age,and the total replacement rate of the 45-year-old is the lowest.Compared with the replacement rate of basic pension account,the replacement rate of individual account pension is lower.Increasing the per capita individual payment,increasing government subsidies and increasing the interest rate of individual account can significantly improve the total replacement rate of urban and rural residents' pension;extending the amortization month will reduce the total replacement rate of urban and rural residents' pension.Through further discussion and Analysis on the financial sustainability assessment and total replacement rate calculation of urban and rural residents,the following conclusions are obtained from the following four aspects: first of all,with the improvement of mortality and life expectancy,the proportion of urban and rural residents aged 71 and over in the total insured population is increasing.Under the low fertility level,in the future,the ratio of the number of insured and the number of people receiving treatment in the urban and rural residential old-age insurance will gradually become smaller,which means that the number of people paying in the urban and rural residential old-age insurance will decrease,and the number of people receiving treatment will increase,that is,the elderly population aged 60 and above will be more and more.The insured rate will gradually increase,and the urban and rural residential old-age insurance will transition from full system coverage to full population coverage.Secondly,in the forecast range,with the increase of the number of people aged 60 and above and the adjustment of the basic pension,more and more urban and rural residents' basic pension will be paid by the government in the future.With the development of economy and the change of price level,the per capita individual payment of urban and rural residents is increasing,and the government's subsidy for per capita individual payment of urban and rural residents is also increasing correspondingly.However,because the number of urban and rural residents increases first and then decreases in the predicted range,which makes the total amount of government's subsidy for per capita individual payment of urban and rural residents fluctuate to a certain extent.But from the general trend,it will continue to increase.With the extension of life expectancy,it is difficult for individual accounts to achieve self-balance under a fixed amortization month.However,in the forecast range,the number of urban and rural residents who survive more than the number of months of amortization continues to increase,which makes the payment gap of individual account continue to increase,and the government's financial subsidies for the payment gap of individual account will also increase.Thirdly,in the prediction range,the financial burden of basic old-age insurance for urban and rural residents is mainly the burden of basic pension.By comparing the proportion of the total government financial subsidies in the financial revenue of the basic old-age insurance of urban and rural residents with the data of OECD countries' pension expenditure in the financial expenditure or GDP expenditure,the results show that if the economy keeps stable development in the forecast range,the basic oldage insurance system of urban and rural residents will be financially sustainable in the future.Finally,from the perspective of urban and rural residents' pension adequacy,the level of total replacement rate of urban and rural residents' pension is relatively low.In view of the conclusions of this study and the existing problems,this paper puts forward a series of countermeasures and suggestions from the perspective of policy adjustment,system parameter optimization adjustment and combination.First,in terms of policy adjustment.For example,we should deal with the problem that the aging population of urban and rural residents will lead to the increase of government financial subsidies.It is suggested that the introduction of measures to encourage childbearing,improve people's willingness to bear,and improve the population structure in the long run;and the implementation of the flexible extension of the age for receiving treatment can not only delay the gap time of individual account payment in a short period of time,but also reduce the amount of government subsidies for basic pension.Second,as far as the optimization and adjustment of system parameters are concerned.For example,it is proposed to dynamically adjust the amortization month number of urban and rural endowment insurance according to life expectancy to achieve self-balance of individual account.To raise the replacement rate of pension for urban and rural residents.It is suggested that the minimum payment period should be gradually increased with the increase of the insured rate,so as to increase the accumulation of individual accounts of urban and rural residents;According to the economic development,we should improve and establish the normal adjustment mechanism of the minimum standard of basic pension,and implement long-term payment and get more incentive mechanism;It is put forward that setting up individual payment grade according to the ratio of per capita disposable income of urban and rural residents can not only realize the dynamic setting and adjustment of individual payment grade,but also ensure the stability of individual replacement rate;Encourage urban and rural residents to choose higher level and more payment.According to the improvement of individual payment level,gradually reduce the subsidies for individual payment,which will not cause the gap between the rich and the poor,nor will the groups who choose different payment levels lose the fairness of social security because of the more and more subsidy mechanisms;It is proposed to increase the interest rate of individual accounts of urban and rural residents in order to better protect the basic life of urban and rural residents.Third,from the perspective of policy combination and system parameter combination.For example,on the financial sustainable development of basic old-age insurance system for urban and rural residents.It is suggested that the policy measures of encouraging fertility intention and the policy of flexible extension of treatment age should be used together.They can improve the aging of urban and rural residents in different time nodes,and then reduce the total amount of government financial subsidies for urban and rural residents' old-age insurance;It is proposed that any one(two or three)or all of the four parameters(basic pension,payment grade,government subsidy to individual payment and individual account interest rate)should be increased,and the combination of the amortization month should be extended at the same time;It is proposed that flexible extension of the treatment age and the extension of the amortization month should be combined,the minimum payment period and payment incentive combination should be improved,etc.Through policy adjustment and parameter optimization combination,the sustainable development of urban and rural residential old-age insurance system is guaranteed.Finally,both policy adjustment and parameter optimization must be based on the regular calculation of the total amount of financial subsidies for urban and rural residents and the replacement rate of pension for urban and rural residents.The results of regular calculation are the basis for adjusting and optimizing the urban and rural residents' insurance policies.