| In recent years,the term "Public-sector Pension Crisis" has been repeatedly discussed in some developed and developing countries.Comparing to the private sector pensions,problems and risk which hidden in public sector pensions are often more serious.China's public-sector pensions,underwent a large-scale system reform in 2015,its policy effects and future direction of optimization are becoming the focus of academic attention gradually.Based on the data of the participants of China's public-sector pension in two counties of a certain province,this article establishes a prediction model attempts to analyze the current operation of public-sector pensions in China and the existing risk points,and explores the future reform direction of public-sector pension in China on this basis.Firstly,this thesis summarizes and sort out the theories and studies related to public-sector pensions at home and abroad,mainly including basic theory,sustainability analysis,public-private sector differences,policy selection and public-sector pensions from the perspective of behavioral economics.The review points out that the sustainability measurement and system change about public-sector pension in the United States is relatively well researched,while the main reason for the relative lack of research on public-sector pensions in China is the lack of available data.Secondly,since the sustainability analysis involves supersede of old and new policies,this article reviews and collates the reform process of public-sector pension in China.Thirdly,this article establishes the sustainability analysis framework of public-sector pension,conducts a comparative analysis on the two selected real-life cases,in order to predict its income and expenditure in 2019-2044.The prediction finds that the sustainability of public-sector pension in two sample countries is not optimistic.The two sample counties will have current year revenues less than current year expenses in 2032 and 2022,respectively,while the cumulative balance will be depleted around 2038 and 2023,respectively.The exact point at which the deficit will occur depending on the age structure of participants in the sample counties at the beginning of the forecast period.After the accumulated balance of public-sector pensions is exhausted,the deficit will continue to widen and public-sector pension operations will have to rely on net financial subsidies.If the government contribution portion of this is deducted,the public-sector pension operations in the two sample countries will deteriorate even further,with little or no savings generated from the beginning of the forecast period.Based on the outcome of sustainability projections,this paper has conducted a sensitivity analysis and concluded that delayed retirement is the best policy option currently available to handle with the public-sector pension crisis.In addition,this paper examines the variables that influence the pension replacement rate under the low interest rate scenario and finds out that pension replacement rate under the 2015 new deal has a small decrease.At the same time,a large increase in volatility compared to the original scenario could be observed,as future pension replacement rates will depend heavily on occupational annuity yield profiles.On the basis of empirical analysis,this paper believes that the feasible reforming policy of China's public-sector pension includes:(1)Establishing public-sector pension actuarial institutions.(2)Continuing to implement relevant parametric pension reforms,such as the introduction of a deferred retirement policy.(3)Optimizing the asset-side allocation of public-sector pension to cope with low interest rate shocks.(4)Improving and refining the institutional arrangements related to occupational pensions.This study has some theoretical significance for understanding the operation of public-sector pension in China,as well as some policy significance for choosing the appropriate reforming path of public-sector pension in the future. |
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