Analysis Of The Relationship Between Endowment Insurance Contribution Evasion And Payment Structure

Contribution evasion occurs when employers or employees do not pay legal required endowment insurance contributions in various ways. At present there are contribution evasion in most countries. The contribution evasion will not only increase the gap of contribution and payment to bear the enormous financial risk of the endowment insurance system, but also affect the balance target of the endowment insurance to the disadvantage of the realization of social income redistribution. In our country, contribution evasion also exists. Contribution evasion has attracted people’s attention with the development of endowment insurance, more and more employers choose to escape the contribution obligation. Therefore this paper will focus on the problem of contribution evasion. Then it will analyze the relationship between contribution evasion and payment structure according to the social insurance financial mode. The social insurance financial mode includes two angels:the pay-as-you-go system and fully-fond system. Payment structure usually includes two aspects:the payment terms and payment level. This paper attempts to find solution about contribution evasion in China through learning from international experience. This paper consists of four parts as follows.The first part is the introduction. It mainly introduces the definition of contribution evasion and the existence of this phenomenon. Because of the existence of contribution evasion, the contribution decreases, the payment increases along with the ageing of population. It’s difficult to maintain the balance of payments. The contribution evasion makes the unequal relationship between the contributors and evasion people. It’s not conducive to the realization of social income redistribution. It also damages the labor market activity. The financial mode determines the contribution mode of endowment insurance. The pay-as-you-go system and the fully fund system are the two basic financial modes. Different financial modes make different payment level and conditions. This paper about the relationship between the contribution evasion and payment structure is divided into the following two aspects. First is to study the contribution evasion influence under the different financial modes. Second is to analyses the factors in the payment structure which can influence the level of contribution evasion. This part arranged about the contribution evasion papers both at home and abroad. The majority of scholars all over the world analyze the contribution evasion main parts, main causes and effects. Very few scholars analyze the payment structure effects the contribution evasion in different financial modes. This paper mainly selects case analysis method and is combined with the reality of our country in order to find the method to solve the contribution evasion in our country.The second part mainly analyzes the relationship between the contribution evasion and payment structure in the pay-as-you-go system. The PAYG system is facing a serious impact on the ageing of the population. The system sustainability questioned with the contribution evasion. Therefore most countries in the world has carried out reforms on this financial system through reforming to fully fund system or cutting PAYG scale. Even so, the PAYG system still has its advantages, such as the manifestation of social fairness and the realization of income redistribution. This part briefly analysis the pay-as-you-go system. Then it selects the countries:Czech and Slovenia which still use the PAYG system. The two countries not only have similarities with our country in the national conditions, but also believe the sustainability of the PAYG system. They don’t change the PAYG system though reforming the endowment insurance. This part analyzes the situation of the two countries of contribution evasion in this system. In the PAYG system, the payment includes many factors, such as the statutory retirement age, the lowest contribution year and the payment formula. This part also uses the measurement method of statistics to analyses the relationship between the payment level and contribution evasion.The third part mainly analyze the relationship between the contribution evasion and payment structure in the fully fund system. Fully fund system has its own advantages, relative to the PAYG system, such as the ability to resist the ageing of the population and financial pressure, promote the development of the capital market as a huge sum of funds, promote the employees incentive effect. More contribution means more payment after retirement. If the contribution evasion may be better in the fully fund system than the PAYG system, this part will analysis this point and choose to Chile as an example. Chile as the first country of implementation of social security in Latin America is the first country to establish fully fund system and individual account system. It’s typical to select Chile. This part firstly analyses the fully fund system. Then it describes Chile’s endowment insurance and the reform. It analyses the contribution evasion before and after reform in Chile. In the fully fund system, the payment are often affected by inflation, the investment rate and other factors. This part analyzes the various influence factors of endowment insurance which can effectively influence the contribution evasion.The fourth part mainly puts forward some suggestions to China’s endowment insurance with combination of the full text. This part first analyses the payment structure of our country employees’endowment insurance. Then it analyses the existence of the problem about the payment structure to the contribution. At present, the endowment insurance in China still can not meet the enterprise workers demand, leading to contribution decrease. Additional social pooling collect contribution deficiencies, the statutory retirement age of payment rules lower, enterprise contribution rate higher and personal account investment return rate lower, inflation higher and other problems, these all lead to the contribution evasion phenomenon in china. This part puts forward, it is necessary to take effective measures to control the old-age insurance system to solve contribution evasion through reform, such as elastic extension of the statutory retirement age and contribution year, combined with the actual setting reasonable benefit formula, perfect the system of personal accounts of investment channels, increase the investment rate of return.