The Impact Of The Central Adjustment Fund On The Balance Of Basic Pensions

In recent years,the birth rate of our country has repeatedly hit new lows,while at the same time,the rate of population aging has been accelerating.The severe coexistence of "fewer births" and "ageing" seems to have pushed China to a crossroads of demographic changes.The increasing degree of aging makes the elderly's pension treatment show a continuously increasing rigid demand,and declining birthrates But it makes the future balance of payments of the pension insurance fund even worse.In order to guarantee the rigid living needs of the elderly population,expanding the coverage of the pension insurance system and improving the level of overall planning have become the common goal of the state and people from all walks of life.In view of the difficulty in achieving one-step national coordination of pension insurance funds,the state established a central adjustment fund system in 2018,and the establishment of the central adjustment fund system has become a transitional measure for the pension insurance system to move from provincial overall planning to national overall planning.In 2019,the proportion of central adjustment funds will increase from 3% to 3.5%.The essence of the central adjustment fund is based on the differences in the development of basic pensions in different regions,and the establishment of a central adjustment fund can improve the basic pension income and expenditure of each province.Then,since the formal implementation of the central adjustment fund system,what is the effect of the adjustment and will it improve the current and future basic pension income and expenditure conditions of the provinces? If the answer is no,how should we optimize it? The central adjustment fund is the first step towards the national co-ordination of the endowment insurance system.The importance of its smooth implementation is self-evident.Therefore,it is necessary to clarify the answers to the above questions.First of all,the theory shows that while the central adjustment fund enhances the sustainability of basic pensions in some provinces,it also increases the burden on the pension insurance system in another province.Based on the generational overlap model and fund balance theory,this paper explores the scientific issues of how the central adjustment fund affects the basic pension balance of each province.Under the implementation of the central adjustment fund system,the balance of income and expenditure of basic pensions in each province is not only affected by changes in the population age structure and average wages of employees on the job,but also by the net allocation of central adjustment funds.According to the operating mechanism of the central adjustment fund,the net disbursement is mainly determined by the ratio of the provincial system dependency ratio to the national system dependency ratio and the ratio of the average salary of the province's employees to the national average salary of employees.The inflows of the central adjustment funds are generally provinces with high institutional dependency ratios and low wage levels,while the outflow areas are generally provinces with low institutional dependency ratios and high wage levels.The implementation of the central adjustment fund is conducive to enhancing the sustainability of basic pensions in provinces with high system dependency ratios and low wage levels,but it will increase the basic pension burden of provinces with low system dependency ratios and high wage levels.Secondly,the current analysis results show that the current basic pensions for urban enterprise employees are polarizing among the provinces,and the implementation of the central adjustment fund has effectively balanced the distribution of the cumulative balance of basic pensions in each province.Starting from the policy objectives of the central adjustment fund system,this paper constructs evaluation indicators such as individual province adjustment indicators and national adjustment indicators based on the central adjustment fund adjustment formula and the statistical data released by the National Bureau of Statistics.The effect of the implementation of the pension system and the current status of the basic pension financial status of each province are analyzed.The current balance and accumulated balance of pension insurance funds are highly concentrated in the 10 provinces and cities of Yunnan,Shanghai,Guizhou,Shandong,Jiangsu,Zhejiang,Fujian,Guangdong,Beijing,and Tibet,and they are showing an increasing trend.The implementation of the central adjustment fund system balance the distribution of basic pension balances in various provinces.The construction of the single-province adjustment index is expressed by the ratio of the amount of appropriation received by the province to the amount of the upper-level agent.From the perspective of the adjustment indicators of individual provinces,most of the provinces with net inflows of central adjustment funds belong to areas with higher institutional dependency ratio indicators and lower average wage indicators;while most of the provinces with net outflows of central adjustment funds belong to lower institutional dependency ratio indicators.Areas with a higher ratio of average wage indicators.In addition,this study also found that the factors that cause the polarization of pension distribution among provinces mainly come from changes in the ratio of institutional dependency ratio indicators.The construction of the national adjustment index is expressed by the ratio of the total net inflow of the central adjustment funds of the "beneficiary provinces" of the adjustment fund system to the total amount of the national central adjustment funds.From the perspective of national adjustment indicators,the total amount of central adjustment funds has generally shown an upward trend.After the implementation of the central adjustment fund system,22% of the central adjustment fund played a role in adjustment.Thirdly,the forecast analysis results show that in the critical period for China to achieve the "two centenary goals",while the central adjustment fund is playing an active role,it has also worsened the pension income and expenditure of Shanghai,Jiangsu,Fujian and other provinces.In addition,there has also been a situation in which underdeveloped western provinces,such as Tibet and Guizhou,provide relief to the remaining provinces.In order to clarify the key indicators of the financial situation such as the size of the deficit in the basic pension funds of each province in the coming years.Taking the basic pension for urban employees as the research object,through the establishment of a population forecast model and a basic pension income and expenditure model,this paper predicts the financial status of the basic pensions of each province before and after the implementation of the central adjustment fund system.After the implementation of the central adjustment fund system,the year when Beijing,Fujian,Tibet,Guizhou,Shanghai,Jiangsu,Shandong,and Guangdong first had accumulated deficits was advanced.At the same time,the year when Hebei,Anhui,Jiangxi,Henan,Hunan,Guangxi,Hainan,Chongqing,Ningxia,Xinjiang,and Shanxi first generated cumulative deficits was postponed.Among the remaining provinces where the cumulative pension deficit was unchanged for the first time,Tianjin,Inner Mongolia,Liaoning,Jilin,Zhejiang,Hubei,Sichuan,Yunnan,Gansu,and Qinghai have reduced their cumulative pension deficit.In addition,the central adjustment fund system has reduced the scale of accumulated deficits in Qinghai,Ningxia,Hainan,Tianjin,Hebei,Shanghai,Sichuan,Guangxi,Hunan,Gansu,Xinjiang,Shanxi,Hubei,Inner Mongolia,Zhejiang,Jilin,Heilongjiang and Liaoning in 2050.But it also increases the scale of accumulated deficits in Guangdong,Beijing,Guizhou,Shandong,Fujian,Henan,Yunnan,Jiangsu,Shaanxi,Tibet,Anhui,Jiangxi,and Chongqing in 2050.In the future,the central adjustment fund system will still balance the distribution of balances and promote the joint maintenance of basic pensions for all provinces.Finally,the results of the optimization analysis show that in the critical period for China to achieve the "two centenary goals",optimizing the solution plan and allocation plan,and achieving national overall planning is not the fundamental way to solve the long-term deficit of basic pensions.The adjustment of the fertility policy and the implementation of delayed retirement can not only enhance the effect of the central adjustment fund,but also ensure the sustainability of the pension insurance system for urban enterprise employees.In order to further improve the central adjustment fund system,this paper optimizes the central adjustment fund system based on the system itself and supporting policies.From the perspective of the optimization of the central adjustment fund system itself,with the adjustment of the solution plan,the year when the seven provinces and cities of Guangdong,Fujian,Beijing,Tibet,Shandong,Shaanxi,and Guizhou first experienced cumulative deficits has advanced,and the three provinces of Shanxi,Hebei and Gansu The year of the first cumulative deficit is delayed.With the adjustment of the appropriation plan,no matter how much the future upward solution ratio is reached,the central adjustment fund obtained before 2050 cannot fully cover the total pension deficit during the forecast period.The national pooling of basic pensions can only alleviate the pension payment crisis in some provinces,but will not affect the sustainability of the national basic pensions.From the perspective of the supporting policies of the central adjustment fund system,both the adjustment of the birth policy and the implementation of delayed retirement can enhance the adjustment effect of the central adjustment fund system.However,compared with the birth policy,the postponed retirement package can even fundamentally change the trend of cumulative pension deficits in some provinces and cities across the country in 2050.The innovation of this paper has the following three points.One is based on the generational overlap model and the fund balance theory to analyze the balance conditions of the basic pension fundraising mode in the case of the implementation of the central adjustment fund system,which enriches the relevant theoretical content.The generation overlap model provides a basic analysis model for the financial operation mode of the basic pension implementation of the pay-as-you-go system.On the basis of this theory,this paper further established the basic pension balance model,and then explored the impact of the central adjustment fund on the basic pension balance of each province.The second is to consider the differences in basic pensions in various provinces through subdivisions,and clarify the year and scale of deficits in basic pensions in various provinces after the implementation of the central adjustment fund,as a reference for improving the central adjustment fund policy.Combining the differences in factors such as the economic level and population size of each province,through the establishment of a population forecast model and a basic pension income and expenditure model for each province,it further clarifies the future basic pension income and expenditure of each province under the two cases of not implementing the central adjustment fund and implementing the central adjustment fund.The time point and scale of the imbalance will serve as a reference for the formulation and improvement of the next policy.Third,in the calculation,the latest fee reduction policy is considered and differentiated values are set under different scenarios,which is more in line with the reality and improves the accuracy of the calculation.In the process of establishing the actuarial model of pension income and expenditure in various provinces,the latest fee reduction policy is taken into consideration,and the influence of fertility and aging itself on actuarial parameters(parameters in pension expenditure and pension income accounting)is also considered.Compared with previous actuarial models,under different policy adjustments,the same contribution base and pension growth rate are no longer used,but differentiated values are set according to different scenarios.