Research On The Optimum Replacement Rate Of Basic Endowment Insurance Based On Institutiongs Of Guangdong Province

The aggravating aging population becomes a significant risk and challenge to the construction process in21st century. In recent years, it has become a focused issue and a great topic for our country and all walks of life to speed up and perfect the social security system, especially the social endowment insurance system. The basic old-age insurance reforms in public institutions have seriously lagged behind the reforms in cities and towns. Reforms in public institutions don’t match the reform pace of market economy and they have already become obstacles to the establishment and improvement of endowment insurance system in our country. Reforming the pension system and adjusting the retirement allowance are beneficial to the socialization of endowment and diversification of financing. Besides, strengthening the individual’s self-protection awareness for endowment insurance and coping with the aging of the population boom can effectively reduce the inherent risks in system and adapt to the needs of market economy development.Public institution’s reform in endowment insurance system started step by step in1990s. However, the process is very slow and lags behind the enterprise’s reform. It seems that the more reforms, the less changes. The reform has existed more than10years up to now, but the reform is still in the exploration stage. Each pilot city and province lacks standard scheme for endowment insurance system, the corresponding implementing rules and supporting measures for the reform, which will have a great effect on the staffs in public institution.As a leading indicator for measuring the level of old-age security, substitution rate level is related to the vital interests of the retirees. Form the aspect of social insurance, the substitution rate can reveal the reasons why public institution’s reform in endowment insurance system is so slow and can analyze the upper and lower limits of optimum replacement rate in endowment insurance. It can provide a reasonable interval for institution’s reform on endowment insurance. Based on this interval, strategic references can be provided to institution’s reform and theoretical category can be also supplemented on endowment insurance. By analyzing the present situation of public institution’s reform on endowment insurance in Guangdong province, and according to the relevant documents of reform in the state council and Guangdong province, the current formula of substitution rate is built, and the basic old-age insurance substitution rate level is estimated. Referring to the ELES model, the optimum replacement rate of public institution’s reform in basic pension insurance system in early stage (2015-2025) is calculated. Based on the analysis of the differences between basic old-age insurance substitution rate and the current rate, the author optimizes and adjusts the parameters of substitution rate (personal account investment yields, payment years, the contribution rate of individual account and excessive coefficient). Finally, the author puts forward a scheme to optimize the current substitution rate and a complementary mechanism to establish and perfect "middle pensioner" welfare complementary mechanisms". The author also points out the policy recommendations to join the related stakeholders, to relate the reform of institutions and to strengthen the government’s financial investment.