Study On The Financial Subsidy To Different Models Of National Pooling About Pension

Under the current basic pension collection and distribution system, the pension isbased on the standard of the employees’ wage. Because of different levels of economicdevelopment, the average wage gap is big throughout China, so is the base pensiondistribution. If we only rely on economic development to reduce regional disparities, theprogress of pensions national pooling must be long. In order to promote pensionsnational pooling process, we come up with the national pension co-ordinate differentmodels, and we can use financial subsidies to accomplish the models.Considering the development of history and current situation of China’s pension, thispaper puts forward four different schemes: the first distribution scheme is the product ofnational average wage and pension replacement rate; the second distribution scheme isthe product of the mean of national average wage and individual indexing wage andpension replacement rate; the third distribution method is the product of the mean ofnational average, provincial wage and individual indexing wage and pension replacementrate；the forth distribution scheme is the provincial distribution scheme. By theseschemes, the local pension is all turned over to the central government, issued by thecentral government, if the pension is insufficient, all the deficiency should be pay backby the central finance; at the same time, the overall scheme has different pension models,which follow different distribution plan, so it may cause the distribution decrease in areaswith higher initial pension payment level. In order to promote the realization of nationalpool co-ordination, balance regional interests, the central government should compensatepension higher income areas welfare loss by using reasonable subsidy plan in accordancewith t Pareto principle.In addition to considering the fiscal subsidy level, consideration should also be givento different overall scheme for income redistribution effect--with judging by incomeredistribution coefficient measure, so considering the final balance of these factors offiscal subsidy and redistribution of income coefficient, we can make a rational choice ofpolicy.