A Study On The Transformation Of China's Pension Insurance System And Its Innovation

As a symbol of progress in social civilization, pension insurance system is the product of the world's development and reflects social justice and Humanitarian. It is justly said to be the essential regulation and the core as well as an important part of social security that will solve the fundamental problem of an aging society. More over, it is the most significant social security system arrangement, so that it has earned much recognition of different national identities. Whether the security system of a society is successful or not is largely determined by the pension insurance system. Therefore, there is no country or region that attaches great importance to social security doesn't think much of the construction of pension insurance system. China is currently in an economic transitional period and meanwhile is confronted with the aging problem of the population. Consequently, the establishment and improvement of this system is directly related to the development of the national economy, and is always regarded as an important national policy which has far-reaching significance in the construction of a harmonious society. This thesis is divided into four parts. The first part is an introduction which will discuss the background, significance, contents and structure of the research, and the literature review will be covered as well.Part II: Reform of China's pension insurance system. A perfect and universal system does not exist. Different countries have different levels of economic development, different age structures and political factors. Accordingly, diversified pension insurance systems are needed. In this part, arguments will be carried out from two aspects: 1. transitional economy of our country and its characteristics; 2. pension insurance system which is combined of the traditional type and the new one.Part III: Transformation of China's pension insurance system. With China's further reform and opening-up, problems of pension insurance in corporate gradually come out. Therefore, its reform and social pooling of retirement expenditure are imperative. The features as well as shortcomings of the traditional pension insurance system and its different developing stages will be briefly discussed. In brief, the first stage is the pilot pension reform (1984-1991); the second is the promotion of pension reform (1991-1998); the last one is the deepening and improving pension reform (1998-present).Part IV: The achievements of the pension insurance system reform and the existing problems. This part consists of four sections. On the one hand, the author confirms the achievements of the present system. For instance, it ensures certain post-retirement pension income. On the other hand, this thesis will point out that despite the remarkable achievements, there are still various problems. For example, funding problem, namely,"empty accounts"problem is still outstanding; managements issues, i.e. management of pension lacks sound legal system, and there is a shortage of monitoring mechanism in the utilization, investment and operation of pension insurance; lastly, problems of pension embezzlement and corruption are widespread. In section three the necessity of innovating the traditional pension insurance system will be discussed. With the establishment and development of social market economy, shortcomings of the traditional system which is applicable to the planned economy are increasingly exposed as an obstacle to further economic development. Therefore, reforming the existing pension insurance system and constructing a new one with Chinese characteristics becomes imperative. Then section four will mainly talk about the feasibility of innovating the traditional system.Part V offers some specific suggestions and measures for further development and improvement of the traditional pension insurance system. 1. Personal accounts should be gradually established. 2. Accelerate the pace of pension insurance legislation and supervision. 3. Raise the retirement age phase by phase. 4. Gradually increase the value of pension funds. 5. Expand the pension insurance coverage. 6. Set up a fund management pattern with Chinese characteristics for our pension insurance system.