A Study On The Balance Of Enterprise Workers’ Individual Accounts Of Basic Endowment Insurance In China

The aging of population is one of the major social problems in the world today. The rapid development of China’s population aging challenges the sustainability of endowment insurance system. In this context, delaying retirement age is inevitable. However, delaying retirement aroused public debate. Whether delaying retirement can adjust the pension payments and improve the payment capability of pension is the major concern. The pension insurance system should be fair and efficient, while the pension fund balance is an important basis. In the SP&IR(social pool plus individual retirement account)basic endowment insurance system, individual account reflects the fund accumulation and payment incentives. The individual account annuities has no income redistribution, therefore the balance of payment is an important subject in the research of the individual account.In this paper, we take China’s enterprise worker’s individual account of basic endowment insurance as the research object. From the perspective of delaying retirement, this paper uses the pension actuarial research method to explore the balance problem existing in enterprise worker’s individual account of basic endowment insurance. First of all, this paper introduces the connotation of the basic endowment insurance system, summarizes the evolution of China’s basic endowment insurance system for enterprise workers and the balance problem of individual account. Secondly, by establishing the individual account expends and benefits actuarial present value model, this paper calculates the individual account balance under the current system and then explores the influencing factors, such as the insured age, the wage growth rate, the yield of individual account, the pension growth rate and the death rate. Thirdly, this paper calculates present value of expends and benefits under different retirement age. Further considering mortality improvement and considering simultaneous variation of mortality and the yield of individual account, we explore how the delaying retirement impacts on individual account balance.This paper has found that the insured age, the wage growth rate, the yield of individual account, the pension growth rate, the death rate and the retirement age will affect the aggregate balance and the boundary of balance of the individual account. We find delaying retirement can improve the border of balance, but the impact on the aggregate balance of payment may be positive or negative. When investigating effects of delaying retirement on the balance of individual accounts, we should consider not only the retirement age, but also many changing factors, such as the benefits months corresponding retirement age, life expectancy of population and the yield of individual account. According to the conclusions, this paper proposes to raise the yield of individual account, adjust the benefits months and delay retirement age reasonably to improve the balance management of individual account.