A Study Of The Problem Of The Paradox Of Pension In China

" Security of the old " is always the goal pursued by the modern civilized society,especially with the development of economic society and the advancement of medicaltechnology, China appeared the low birth rate and low mortality phenomenon, theageing of the population trend is increasingly obvious, pension problem attracts moreattention.Over the past30years, China’s endowment insurance has made greatachievements," the Trinity" of the social security system, including social, individualhouseholds and voluntary retirement, already provided embryonic form. The structuremeets the requirement of the development of market economy, and is consistent withthe world trend of the development of pension system. However, in the process of thepension policy implementation it also exposed many problems, one of which is thatthere were higher levels of endowment insurance premium and low level of pensionreplacement rate in China, and also continued the momentum of decline of pensionreplacement rate, forming the Chinese “pension paradox”. The report of "pensionparadox", has aroused widespread concern and discussion in the community, becausethe "pension paradox" is not only related to the broad masses of enterprise employees’pension rights, but also related to the reform of endowment insurance system in China.If "pension paradox" exists truly, the safeguard function of the urban enterpriseworkers’ old-age insurance system will be questioned.The young employees willexpect that they will face a more uncertain future in the retirement age, thereby theenthusiasm to participate in old-age insurance will be weakened. Therefore, it isnecessary to study and discuss the problem further.After the search of the literature about endowment system, we discover that thedomestic and foreign theories are all focusing on the overall consideration of theendowment insurance system or the designing and planning of the whole system. Itlacks the specific interpretation and research to this issue. This paper is on the basis ofprevious studies, develops the study about improvement of endowment insurance system more specific, and is focusing on the “pension paradox” in the basic old-ageinsurance for urban enterprise workers. This paper mainly finishes the followingaspects of jobs:The definition of Chinese “pension paradox” is given in this paper. Then it usesthe actuarial model and EXCEL to calculate the substitution rate of the urbanenterprise workers’ basic old-age insurance system. At the same time, it uses thecomparative analysis, to compare with on-the-job workers’ payments and retiredworkers’ annuities. And it compares with China and other countries on thereplacement rate of pension and insurance rates. Through the above three aspects ofquantitative research and comparative study, it reveals the essence of the" pensionparadox " and concludes that the Chinese " pension paradox " is objective. The paperdiscusses the factors influencing the "pension paradox" from four aspects: thedeficiencies of granting method, the necessary of pension fund to pay the transitioncosts, the low value-added of pension fund, as well as the lag of enterprise annuitydevelopment. On the basis of the study above, this paper from the system and outsidethe system puts forward to solve Chinese type" pension paradox" problem.