Research On The Endowment Insurance System With Social Pooling And Non-financial Account

In the early1990s China established an innovative endowment insurance system, SP&IRA (the combination of social pooling and individual retirement account), based on the previous pay-as-you-go system. Theoretically, this system, aware of both fairness and efficiency, embodies not only the social solidarity but also a personal incentive mechanism. However, the10years of practice has been accompanied with a deficit, and some individual retirement accounts even ran in the state of "empty accounts". At the same time, there have been issues such as the overpaid contribution rates, the low pool level of endowment insurance and the ambiguous property rights of individual accounts. Although the scale of SP&IRA has been adjusted several times, these problems remain unresolved. Why is there a gap between the theory and practice? Is it not suited for China’s national conditions and asking for another reform? These are the research backgrounds and the questions to answer in our work.Firstly, we classify the major endowment insurance systems. Secondly, we study the endowment insurance systems of two states, Sweden and Singapore, and then summarize the features that can be adopted in China’s endowment insurance system. Thirdly, we conclude that the partial accumulation is still an ideal way to fund China’s endowment insurance, while on the technical path the SP&IRA with fully-funded individual retirement accounts is not suited for China’s current national conditions; based on this conclusion we propose that "social pooling and non-financial account"(NDC) is temporally a rational choice before the implementation of "social pooling and financial accumulated account"(FDC), and we also analyze and prove the advantage of this proposal. Finally, we perform a case study on the current status of SP&IRA in city A, predict the risk of endowment insurance fund balance under FDC, and advance to propose the related policies required during the transition to FDC.The NDC scheme is suited for the national conditions of China, and will help. China to get rid of the current issues in the reform and eventually move on to FDC. Through the study and reflection, a correct understanding of the current status of endowment insurance in China will give a clear direction for the reform today.