On The Equalization Of Public Pension System In Urban And Rural Areas

There will be an irreversible aging society in twenty-first century, which is China must face. With the largest elderly population, the total population of the age is increasing. Compared with developed countries, the population aging in China presents a clear rural-urban inversion. That is, the degree of aging in rural areas is higher than urban. For the large-scale urban and rural old people, the basic old-age security is the first and the most immediate need, and this is inseparable from the role played by the public pension system. In China, urban and rural public pension system is mutually independent. While the urban public pension system got constantly improved, the rural public pension system always wandered in the puzzle, and it has been one of the weakest links in China's social security system. The missing of rural public pension system's protection couses that the Occurrence probability of old-age poverty in rural area is higher than in urban area. For this reason, the government issued "guidance on the new rural public pension system" in 2009, which outline a new framework of the rural public pension system, and clear an object of full coverage to the rural people until 2020. It means that, public pension system, as an important component of social security system, has entered the process of equalization.On this background, the equalization of urban-rural public pension system is selected. and we try to solve the questions in the following two areas:in theory, to explore basic connotation, theoretical basis and the implementation mechanism of the urban-rural public pension system equalization; in practice, to analysis the status quo, systemic causes and the welfare effects of the urban-rural public pension system equalization in China, and to explore the achievement of the urban-rural public pension system equalization in China.All the members in the society will face the pension risk. The existence of this risk will cause some old-age residents to be in poverty. As a risk control methods with family unit, the family pension is not only constrained by certain conditions but also uneffective in regulating the income gap and preventing old-age poverty. Commercial pension insurance institutions driven by profit maximization will provide uncomplete protection, and is also unable to effectively deal with pension risks. As a result, the government-supplied public pension system is needed. At the same time, it also determines that the basic goal of public pension system is to adjust the income gap and achieve social equity.The equity objective of public pension system is based on the equal right of residents'living in retirement, which is a basic human right and should be fair enjoyed by everyone. This right exists with the person's birth and is created equal. To protect this equal right, the government has the responsibility to give old people certain material assistance through the public pension system through the social old-age insurance in order to prevent them fall into poverty in old age. So the equal right of living in retirement is the cause of public pension system's existence and the basis of the equity target of public pension system. To ensure the equal right of living on retirement, the Government must give residents some material assistance through public pension system design, in order to ensure the residents can live at a modest income and living standards, no matter the different probabilities between residents, so the fair distribution of income is the actual performance of the social equity.Equalization of urban-rural public pension system is the inevitable requirement of the equal living right in retirement. To ensure the equal living right in retirement, the government must ensure that urban-rural residents have equal opportunity to participate in through the system design, and share the public pension system equally according to their aspirations, which are the basic elements of urban-rural public pension equalization. In particular, the equalization of urban-rural public pension system is a process in which government should give urban-rural residents undifferentiated public pension services through the public pension system arrangement. In this process, the government must ensure that urban-rural residents enjoy equal opportunity and equal process through system design, so as to achieve a reasonable distribution of income and thus achieve equal living protections, equal health protections, equal participation in society and equal solace of urban-rural residents and this is just the result equality. Then some criterions is selected from the opportunity equality, process equality and result equality, just like the insured rate, replacement rates and other indicators.Equalization of urban-rural public pension systerm is a process from defference to equalization between urban and rural area. The difference between urban and rural area is based on the certain socio-economic background, so achieving the equalization of urban-rural public pension system should possess some conditions, including the government's financial support with the economic development and the transformation of government's functions. Under certain conditions, the government and residents, as the supply side and demand side, cooperate, compete and conflict with each other to promote the process of urban-rural public pension system equalization, and to achieve a reasonable distribution of income. In this process, standarding the responsibilities of payment, reasonable division of intergovernmental oversight mechanism and a demand expression mechanism make up the approach to realize the equalization.The urban-rural public pension system in China is mutually independent. With the criterion of urban-rural public pension system equalization, the Inequality status quo of China's urban-rural public pension system is obvious. In opportunity equality, the urban public pension system has been builted in all the areas, but at the same time, there is geographic coverage differences in the rural public pension system, and the insured rate of public pension system in rural areas was significantly lower than in urban areas; In process equalization, Per capita pension payments and replacement rate levels in urban areas are all higher than those in rural areas. Because of the weakness security, the satisfaction level of rural residents is not very well; In result equalization, the average expected life, livelihood satisfaction and the level of participation in social activities in rural area are all lower than in urban area.To measure the redistribution effect of China's urban-rural public pension system, replacement rate, the net present value of transfer payments and the internal rate of return are selected. It shows that the redistribution effect of urban-rural public pension system is significantly different. Under urban public pension system, replacement rate of low-income people is significantly higher than that of high-income people and middle-income people, which suggests that low-income people get more benefits in this system. The intragenerational redistribution effect in one generation of urban public pension system is obvious. The first generation's internal rate of return is the highest, and then it goes down from generation to generation, which indicates that the elderly get more benefits in this system. Intergenerational redistribution effect of urban public pension system is also obvious. Under rural public pension system, the value of replacement rate and the internal rate of return are inter-generational groups of participants after the target internal rate of return have no change, which indicates that the intergenerational redistribution effect and intrageneration redistribution effect in rural public pension system are not obvious.The inequality status quo of China's urban-rural public pension system is mainly derived from some system holds, just like the differences in system design, and the differences in system operation, and other institutional bafflement. In the system design, the funds operating mode of urban-rural public pension system is different, which bring the difference in government's responsibility and then impact the support capability. And under lower level design of the regulatory·hierarchy, the promotion of the system depends directly on the local economic development; in the system operation, there are also some differences in continuous operation, stabilizing operation and the responsibility of government promotion. all of those factors limit the residents'behavior to participate the system; In addition, the lack of rural residents' demand expression mechanism, isolated urban-rural household registration management, and the asymmetric division of the intergovernmental financial resources also affect the equalization of urban-rural public pension system.There are two objectives in China's urban-rural public pension system equalization. The first is opportunity equality for all the people, which means that a new rural public pension system is established throughout the country, and the insured rate in urban-rural residents in enrollment ratio is continuously improved so that all the social residents are able to enjoy equal opportunity to participate in public pension system; The second is the replacement rate equality for some provinces in which the opportunity equality has achieved. Replacement rate equality not only means that the government should ensure public pension system's redistribution effects through financial subsidies, but also means that the insured people, regardless of urban-rural difference, are able to receive the same cost-benefit ratio, it is a concentrated expression of the urban-rural public pension system equalization.Through the study on the risk perception and pension method of Chinese residents, the realization conditions of urban-rural public pension system is mature. Due to lack of old-age security, more rural residents have been aware of the risks which they must face, but the family pension is still the first choice for most of the rural residents. Nevertheless, the aging population and labor migration are weakening the protection ability of family pension, while the rapid economic growth and the continued increase in the size of fiscal revenues provide economic support for the equalization of urban-rural public pension system. Based on this, the equalization of urban-rural public pension system can be achieved through the establishment of a new rural public pension system, promoting the convergence of urban-rural public pension system, and improving the supporting institution.