Extending Retirement Age And Old-age Insurance System

Nowadays, Aged tendency of population is unprecedented and a global phenomenon, without parallel in human history. The same situation appears in China, where the aging of population has increased considerably. The twenty-first century will witness even more rapid ageing than did the century just past, which would be more pervasive and enduring. Under this ground, if we keep the earlier level of substitution rate of pension insurance without reforming the existing system, individuals, employers and even the municipal authority would face strong financial pressure to manage sufficient pension fund. Studying from the mechanism of old-age insurance system itself, this article looks out the road to reform for future development of old-age insurance system.Since 2005 China has expanded the coverage of its basic old-age insurance after establishing a unified system for enterprise employees in urban areas across the country with a social-pool-plus-personal-accounts scheme in 1997. Combining with forecasting the result of population age structure, this article introduces a quantitative approach to sensitive analysis on the future requirement of pension fund balance by assuming a late retirement scheme. All of above-cited ways are significant for finance paying capacity of future endowment assurance, staff's burden of support and the security degree for old people.This article uses strict calculation and massive data to support the argument that extending retirement age would help to deal with the fund financial difficult existing old-age insurance system and brought by the crisis of aging of population. This article witnesses how prolonging retirement age will affect the society and old-age insurance system, analyses labour employment and early retirement which are concerned as the major two obstacles to existing insurance system, and then advances that it could be resolved by organic system design.