On The Deepening Of China’s Public Institution’s Old-age Insurance Reform

Most of public institutions in China have been implementing pension system while enterprises implementing old-age insurance system. The fact that public institution staff’s retirement pension is much higher than that of enterprise staff causes huge social equity problem. Double-track old-age insurance system places great pressure on government finance. It impedes the mobility of labor and what’s more, hinders the development of social security system. Therefore, an increasing voice of pension system reform has been raised by sectors of the society. The "Plan of Pilot Program for Public Institutions’ Old-age Insurance Reform" and "Social Insurance Law of the People’s Republic of China" issued in2008and2010, respectively, provide guiding policy advice and legal protection to the reform. However, on current situation, the reform has not been carried out smoothly and is now, in predicament.Based on Institutional Change Theory, this dissertation studies the reform from perspectives of history, main subjects, cost of system transition, ideology and system supply. This dissertation also studies how these negative factors influence the reform and gives advice on the deepening the reform.We found that:a) public institution’s pension system has self-reinforcing mechanism, which leads to path dependence by making "casual connections"; b) the reform breaks the equilibrium state among government offices, public institutions and enterprises, which causes decreasing interests of public institutions; c) local governments procrastinate the reform for their own interests and political achievements; d) the reform makes a huge system transitional cost which places great pressure on government finance; e) there is no ideological foundation among staff of public institutions; f) government does not provide sufficient systems on laws, payment, management and occupational pension, which causes problems during the reform.Therefore, a) pension system of government offices and public institutions should be reformed simultaneously as that of enterprises; b) occupational pension system should be established for compensating for the loss of public institution staff; c) cost of system transition should be reduced by broadening the sources of funds and extending the retirement age; d) effective laws should be carried out in order to give legal protection to the reform; e) reforms of payment, management and occupational pension system should be synchronized with public institutions’ old-age insurance reform; f) favorable ideological foundation should be built.