Problems Of China's Existing Endowment Insurance System And Countermeasures

Since the 1980s in the last century, China's urban endowment insurance system has experienced several times of reform that proves to be effective. However, many problems remain, so that many state-run enterprises are unable to pay endowment insurance premium, some cities' endowment insurance funds are in deficit, some retirees cannot be timely awarded endowment pensions due to them, and incumbency employees have to shoulder excessive burden, and so on. So, it is an imminent task to reform the existing endowment insurance system. This thesis comprises four parts.The first part of the thesis introduces domestic and overseas theories on the endowment insurance system. As an important part of social security system, the endowment insurance system is composed of four parts, namely, endowment conditions, endowment treatment, endowment funds raising, management and use, and retirees' management and services. Among them, endowment funds raising, management and use are considered most important. This part lists the study by domestic and overseas scholars on the endowment system. The first part also compares the endowment insurance systems of global countries in terms of funds raising model, benefiting model and funds management model.The second part introduces the status quo of China's endowment funds and the country's population aging trend. First, this part illustrates the imbalance of China's endowment funds in the light of demand and supply. The endowment insurance system of China for its employees has been always employing the model of pay-as-you-go. However, with the increase of employees' payment and retirees, there has been an explosive demand on the endowment insurance, so that the country and enterprises are excessivelyexacted, and the old-age pension is in serious short supply. All these problems result from China's population aging trend in recent years. Different from other countries entering the population aging stage, China's population aging has got its own characteristics, for example, fast speed in population aging, a large number of aging population, inconsistency between the aging process and economic development, imbalanced development of aging between different regions, and so on. The traditional endowment insurance system can no longer bear the burden of population aging. Both the imbalance of China's endowment funds and the country's population aging trend pose requirements on reform of the existing endowment insurance system.The third part discusses the existing problems in China's endowment insurance system reform. First, this part reviews the progress of China's endowment insurance reform. China's reform on the endowment insurance system that was initiated at the beginning of the 1980s experienced three phases that were marked by the three documents issued by the State Council respectively in Jun. 1991, Mar. 1995 and Jul. 1997, which finally contributed to the existing endowment insurance system. The original intention of the system was positive, and once played an active role in promoting economic development and social stability. However, this system has gradually exposed all kinds of problems with China's rising population aging crisis. For example, hidden debts of endowment funds, vacant personal accounts; excessive burden of the society and enterprises, and arrears of endowment insurance premium. These problems sufficiently reveal that the existing endowment insurance system can on longer adapt to economic development, and cannot well solve China's population aging crisis, therefore, the system has to be reformed.The fourth part is unfolded based on the three parts mentioned above. There have been debates over the reform on China's endowment insurance system, such as advocates of pay-as-you-go system, funded system and partially-funded system. China's reform shall take into account more of the country's reality instead of mere international experience. This part briefs the endowment insurance systems of two representative countries, namely, Singapore and Chile, thus representing the characteristics of the two endowment insurance models (central government accumulation funds model and personal savings model). This part evaluates the two models' advantages and disadvantages. By learning from other countries' experience and taking into consideration China's reality, the target model of China's endowment insurance reform shall take into account the following six factors: (1) The endowment insurance system's level has to be in consistency with China's reality; (2) The endowment insurance system shall be conducive to economic growth; (3) The endowment insurance system has to be stable and sustainable; (4) The endowment insurance system shall be open and flexible; (5) The endowment insurance system has to distinguish the functions of the government and the market; (6) The endowment insurance system reform has to be interactive and harmonious with other reforms. Taking into consideration the above-mentioned factors, the author portraits the framework of China's endowment insurance system, namely, convergence of unified social planning and personal accounts, specifically, the former employs pay-as-you-go system, while the latter adopts funded system. The unified social planning system shall be strictly separated from the personal accounts system for management.Then, this part proposes the countermeasures for improvement of China's existing endowment insurance system. Aimed at the status quo of...