China's Pension System

Abstract

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Social Security Individual Accounts in China: Toward Sustainability in Individual Account Financing

“…By comparison, Feldstein and Leibman (2006) argue that China should fund its individual accounts [5]. Dorfman et al (2013) present the case for China not having mandatory funded individual accounts, but rather having mandatory notional (unfunded) individual accounts and voluntary funded accounts [6]. Leckie and Xiao (2014) comment that the development of the National Social Security Fund, explained later, is a major development in the management of investments for funded individual accounts [7].…”

“…While the money contributed to the individual accounts was not a subtraction of money that had been contributed to the social account system, it was money that could have been used to raise the contribution rate to the social account system to assure that it was adequately financed. One estimate suggests that the contribution rate necessary to fund the Urban Employees' Pension Program on a pay-as-you-go basis would be 35% [25], with a more recent estimate suggesting it might be 30% [6].…”

“…By comparison, one study of the implicit debt has placed the implicit debt for future pensions for urban employees and government workers at between 44 and 56% of GDP if the contribution rate were to be raised to 25% [6]. That study did not estimate the implicit debt associated with the pensions for rural workers, but that amount would be very small in comparison because there are no legacy costs, only the implicit debt that has been incurred since the start of that system.…”

Quantitative Analyses of Transition Pension Liabilities and Solvency Sustainability in China

“…Especially after the 1997 structural reform, attention has been focused on the problems related to public pension liability and solvency sustainability during the transition period [1][2][3]. The goal of pension reform in China is to shift the financing mode from an unfunded system to a partially funded system (UF-PFF shift).…”

Stochastic Forecast of the Financial Sustainability of Basic Pension in China

“…The sustainable development of it has a close relationship with social harmony as well as economic sustainable development [1]. Therefore, it is essential to keep the long-term balance of contributions and expenditures of a basic pension in order to accomplish sustainable development of the system [2][3][4].…”