The Current Situation Analysis And Improvement Suggestions Of Shanghai Social Pension Insurance System

October1,2010witnessed the Shanghai municipality’s issuing ofTrial Guidance of Flexible Measures to Postpone Accepting the BasicPension Applications for Various Enterprise Talents, which offers a sounddirection to the development of Shanghai social pension insurancesystem. The article is grounded on this and aimed to deeply probe intosome methods to mitigate social pension pressure and boost itssustainable and sound development in the long term.Based on the reform, current situation and existing problems ofShanghai social pension insurance system, the article has a briefintroduction of the reform progress and achievements made so far ofthe Shanghai social pension insurance system and engages into anin-depth analysis afterwards. The main causes of Shanghai socialpension system problems include Shanghai’s aging of population, theshortening of social pension payment years and extending of benefityears and the immature management system etc. The article thenproposes some solutions in light of the problems and highlights thesuggestions to maintain the long term and balanced developments ofShanghai social pension insurance system. The suggestions are:1. Accelerate to enlarge the coverage of basic social pensioninsurance.2. Appropriately prolong the legitimate retirement age.3.Extend the Minimum Payment Years of Shanghai social pensioninsurance.4. Rationally adjust the structure of government financialexpenditure and strictly control the social pension payoffs.5. Adjust theWage Tax Rate of social pension insurance payment.6. Decrease thesocial pension amount of re-employment workers by a reasonableextent.7. Enhance the operational management of social pensioninsurance fund and guarantee its value to be maintained andincreased.8. Establish a flexible retirement postponing system and make it an indispensable supplement of social pension insurancesystem.The proposal to establish a flexible system to delay retirement is ahighlight of this article. This part, as an essential supplement to optimizeShanghai social pension insurance system, analyzes the theoreticalbases to set up a flexible retirement postponing system from ActivityTheory, Disengagement Theory, Age Hierarchy Theory, DifferenceTheory of Individual Human Capital and Social Capital and EconomicCycle Theory. Concerned with Shanghai’s practical situations, thearticle later discusses the reality basis of setting up the flexible retirementpostponing system. From the perspective of optimizing Shanghai socialpension insurance system, this postponing system can add flexibility tosocial pension insurance system, improve the security level of socialpension insurance system and help to remit the social pension fund’sfinancial crisis. This part also predicts the potential problems facing theflexible retirement postponing system and comes up with suggestionson its establishment.The article mainly applies the combined method of qualitative andquantitative analysis. It builds the relational model of RetirementAge/Retirement Population Dependency Rate and Wage Tax Rate toanalyze and draws the conclusion that extending retirement age cansolve the current dilemma of social pension insurance system. Moreover,the quantitative model of social pension insurance Replacement Ratiois applied to research factors including initial age when employees joinsocial pension, Retirement Age, Average Remaining Lifetime, IndividualAccount Rate of Payments, Basic Pension Payment Rate, SocialAverage Wage and Initial Wage when joining Social Pension Insurance,Individual Wage Increase Rate, Social Average Wage Increase Rate,Inflation Rate, Individual Account Interest Rate etc. and their impactson Replacement Ratio and therefore conducts a simple sensitivity analysis on respective factors. Then some suggestions are proposed onShanghai social pension insurance system reform such as speeding upthe extending of basic pension insurance coverage, postponeretirement age by a reasonable margin, prolong Minimum PaymentYears of Shanghai social pension insurance etc.A conclusion and prospect are given in the last part which mainlyillustrates the problems that are beyond the article’s research and theprospect towards future social pension system development.