Research On Shanxi Institutions Pension Reform

Under the background of aging of population, the increasing demand for China’s pension fundcaused large pension payment gap, which is challenging sustainability of endowment insurancesystem. It’s urgent to reform and improve China’s pension system, to break fragmentized situationcaused by dual structure of urban and rural area and “double track system”of city and town, toincrease overall planning level. Of which, public institution become a main object to be reformedbecause of its high substituting rate of pension and excessive financial burden.2008, State Council approved the Pilot Plan of Public Institution Employee Pension SystemReform, Shanxi province,as one of five reform experiment provinces, undertook the importantmission of finding a correct direction for reform of public institution system.But at present, reformprogress on Shanxi provincial pension system is tardy and reform effect is indistinct. The reason isfollowing two aspects of reform controversy: the first is fairness. Institution staff was not includedin the scope of reform, which leads institution staff to dissatisfy. The second is rigidity of wages andbenefits. The reform direction is inclined to urban enterprise workers pension system, i.e.substitution rate will go down to40%-50%from original80%of institution. Whereas old ageinsurance has rigidity, which increases the resistance for reform.From the view of objective influence factor, it includes how to integrate with other systems,for example, there is a collision with Law of Teacher; fairness issue, material benefits gap betweenenterprise and institution as well as institution and government department is increasing;substitution rate issue, decreasing substitution rate directly lead to a slip in quality of institutionretirees’ later life; the issue of sharing financial burden, financial tension isn’t alleviated reasonableby three sharing way of financial department and social security institution.The reform of institution pension system must be enforced. Thereamong substitution ratedecreasing can be made up by the advantage of“mutual assistance+personal” account, bymarketed-operation of personal account fund. About the problems raised during reform process, weshould put forward a solution from the view of fairness, finance and supervision:1.by meaning ofunifying pay and deliver standard，policy and regulation,and reform object,promote the smoothtransition of old age pension;2.establish marketed-operation of personal account and employerpension,widen investment channel,relax limit scope, strengthen on training professionals,therebyrealize to maintain and increase the value of investment fund.3. choose reasonable investsupervisory mode, complete relative law and regulation,set up comprehensive informationdisclosure system and make sure to advance smoothly the reform progress.