Actuarial Studies Of The Occupational Pension In China

With economic development, continuous improvement of living standards and health standards, human life is also in constant extension. At the same time, however, comparing to most developed western countries, we are facing the problem of entering the aging society before those countries, moreover, China's per capita GDP is still at a relatively low level, the state's financial burden is increasing. The existing basic pension system can hardly survive due to a heavy payment pressure. It's about the time that such system must be changed. Based on these, the supplementary of the pension system, the occupational pension system is advocated by the government.It has been more than 100 years since the establishment of the first occupational pension system in the world. As an important member and a strong complement to the support system, the multi-level old age annuity plays an important role to the political stability and economic development for many countries. Actuarial study on occupational pension has brought widespread attention in academic at home and abroad. Currently the academic research of actuarial analysis on occupational pension mainly focuses on occupational pension replacement rate. When calculating the pension replacement rate, the Certainty Method is largely used for the selection of parameters in the actuarial model. Actuarial mortality assumptions are the key to the current pension actuarial studies, the mortality data released by National Bureau of Statistics, which relatively takes the death rate as "static", are mostly used in such studies; While in fact mortality is changing over time, increased life expectancy has become a global trend. In this paper, we use Lee-Carter model to predict the mortality declines, and based on this, we analyze the impact to the occupational pension.This paper firstly defines the occupational pensions in theory and describes its historical development; Secondly, we apply the Lee-Carter model, a model for predicting the mortality rate, to Chinese population and consequently get a more reasonable mortality rate forecast, which proves that mortality has decreased with the time being. Finally, this paper analyzed the measurement impacts on the contribution rate of DB model's occupational pension and the replacement rate of DC model's occupational pension due to the fact that the mortality is decreasing. Some suggestions with regard to the risks of longevity in occupational pension are also provided in this paper, for the purpose of reference to relevant departments and agencies.