The Value Of Basic Research Funds Hedge Individual Pension Accounts

With the rapid growth of material and social civilization today, people’s awareness of pension is gradually strengthening. More and more people begin to pay close attention to how their pension is issued, how to maintain and increase the value their pension, as well as whether the current pension can guarantee their life when they get retired. Since the18th National Congress of the Communist Party of China the people’s livelihood is getting more and more attention."Elderly will be looked after properly." has become the common aspirations of all the Chinese citizens.Since the reform in1997, the pension system has changed into the combination of social pooling account and individual account.8%of the worker’s salary will be paid into the individual account.20%of that number will be paid by the organization, of which3%to pay into the individual account,17%into the social pooling account. The social pooling account is mainly used for the current pension payments; Individual account is held for complete accumulation, which is for pension payments after retirement. But under the current condition that transformation cost has not been fully consumed and the operation of pension system applies dual management mode which also affect each other, money in individual account have been embezzled to a large extent, which has already caused "empty account" running status of individual account. This not only affects the long-term balance of pension payments, but also destroys the financial basis of social security system in our country. And to the worst it may cause the collapse and regression of current social pension system. Some scholars believe that we can introduce notional defined contribution. But the author thinks that NDC is also a kind of transitional mode for pension, and it will eventually turn to individual account. So regardless of which system is in use at present, the final stage of pension system should be individual account and ensure the increased value of individual account. This is the most fundamental way to solve the problem of pension payment.