A Study On The Factors Affecting The Treatment Level Of Endowment Insurance For Urban And Rural Residents In China

In February 2014, on the basis of old rural endowment insurance and urban endowment insurance system, The State Council issued a document that the country will establish the new urban and rural residents endowment insurance system(URREIS) With the development of economy and society, China is accelerating its urbanization. As a basic social endowment insurance system, URREIS has been playing a more and more important role.The main funds of URREIS come from individual payment and government financial subsidies. Using the statistical and actuarial research methods, constructed the actuarial model of the new system’s treatment level. Actuarial model can measure the pension replacement rate, and the study found that, under the residents’ average income level of 2013, pension replacement rate is still too low with the new set individual contribution grade of 1500 yuan and 2000 yuan, the pension replacement rate of 2000 yuan grade is even less than 50%. Through a sensitivity analysis of the actuarial model established, the study found that the influence factors in URREIS,the individual contribution grade’s sensitivity coefficient is the highest, the pension fund’s investment rate of return and the number of years of contribution are the second and three, according to the results of sensitivity analysis, to improve the treatment level of URREIS, the government should focus on improving the contribution from the individual payment.Reorganized the data of residents’ minimum wage, per capita net income and the per capita consumption expenditure data of the national 31 provinces and cities(autonomous regions) in 2013, analyzed the individual contribution level of URREIS, the study found that the ability of Chinese residents’ individual contribution is insufficient, lots of money are still deposited in the bank. Based on the 31 Chinese provinces’ population and financial data, the study found that financial subsidies for URREIS are accounted only 2.39% of the central government expenditures and 0.57% of the local government fiscal expenditures. Absolutely, the current rate of financial subsidies are still low, the pension treatment cannot meet the basic needs of life for those Chinese urban and rural aged residents.Subsequent adjustment of URREIS should focus on: improve the grade of individual contribution, increase the rate of financial subsidies, establish and improve the subsidy payment adjustment mechanism and improve the rate of investment return of the pension fund.