Research On The Old-age Security Level Of Jiangsu Province From The Perspective Of Fiscal Sustainability

Jiangsu Province is the third largest province in China.With the accelerated development of aging,the expenditure on old-age security is also increasing year by year.Although at present,the income and expenditure of old-age security in Jiangsu Province is in a good condition,under the pay-as-you-go model of the actual operation of the old-age insurance system,the change of population structure has a significant impact on the income and expenditure scale of the old-age insurance fund.Especially,in 2016,there were nine areas with accumulated surplus of over 100 billion old-age insurance funds in China.In 2017,Shandong Province appeared that the income of the current old-age insurance fund could not be offset.Therefore,there is no pension receipt and payment crisis in Jiangsu Province at present,but the pension income and expenditure under the current pension security system still deserves our attention.This paper combs the existing literature at home and abroad,and expounds the relevant concepts and theoretical basis.From the perspective of fiscal sustainability,this paper studies the level of pension security in Jiangsu Province.It holds that under the benchmark situation,there is a turning point in the income and expenditure of pension insurance funds in Jiangsu Province in about 2022,and there is a gap in the income and expenditure of pension funds in 2022.Since then,the accumulated balance of funds has been decreasing continuously,and the accumulated balance has been exhausted in 2030,and it has been in debt since then.Establishing the fiscal sustainable value including government debt(1.16%)and non-government debt(2.36%)to measure the ability of the government to maintain the original financial situation under the condition of the increase of pension expenditure.It is concluded that the appropriate expenditure level of Jiangsu Province's pension security is 5.55% and 7.20% of GDP respectively.Further,we simulate and analyze the operation of the old-age security system in Jiangsu Province,and calculate the impact of the four adjustment policies on the income and expenditure of the old-age insurance fund: increasing the GDP growth rate;implementing the high and low speed retirement policy,increasing the pension age;reducing the replacement rate of the old-age pension;and increasing the rate of return on the investment of the old-age pension.It is believed that among the four policies,the policy of postponing retirement and raising pension age has the most obvious effect.As long as the policy of postponing retirement is implemented in the early stage of decreasing the accumulated balance of pension insurance fund.Regardless of the high-speed reform or the low-speed reform,based on the large amount of accumulated fund balances in Jiangsu Province,there will be no gap in fund revenue and expenditure even if the pension expenditure continues to increase under the aging population in the later period.On the contrary,the cumulative fund balances of 25.07% and 8.43%(GDP)will be realized under the high-speed and low-speed reform schemes respectively,and the financial situation of Jiangsu Province will not deteriorate,but will improve.Secondly,under the policy of reducing the substitution rate of pensions,although there will still be a gap in the income and expenditure of pensions in Jiangsu Province,the debt for the first time appeared in 2030 under the benchmark situation,which delayed for four years,and the accumulated deficit of pension funds appeared for the first time in 2034.The government financial situation under the policy was measured by the sustainability value of the government debt factor and the non-government debt factor respectively,which delayed four and five years compared with the benchmark situation,and deteriorated in 2032 and 2042 respectively.Increasing the rate of return policy also played a role.The setting of 6% and 9% investment rate of return delayed the gap of pension income and expenditure by 1 year and 3 years respectively compared with the benchmark situation.In addition,the policy implementation effect of increasing GDP growth rate is very small,basically equivalent to the benchmark situation.Finally,four measures and suggestions are put forward to improve the operation of the pension security system in Jiangsu Province,including implementing the deferred policy and so on.