Research Deferred Pension Replacement Rate Model Based On Tax Revenue

Under the background of the accelerated process of population aging and immaturepension system, the government should encourage the development of commercial pensioninsurance, and make it effective in the third pillar. Due to its imperfect tax incentives, thedevelopment of commercial pension insurance is slow. Selecting the appropriate taxincentives is critical to stimulate the purchasing power of commercial pension insurance.This paper discusses the commercial pension insurance’s changes of the replacementrates and tax revenues under the EET mode, and determine the optimum payment andapplicable tax rate when get the pension in the current income level of the national averagewage for urban workers, Firstly, this paper analyzes the current pension replacement rate ofthree pillars. Through the theory of tax expenditures and tax fairness and efficiency, theEET mode is the best. Secondly, the paper established replacement rate and tax revenuemodel with TTE and EET, through the sensitivity analysis of the tax rate and payment, theoutcome is: EET model can effectively improve the pension replacement rate; whencalculate the payment, the wage rate should be taken to consider but not the fixed payment;EET mode can make little loss of tax present value in the long term; in the acceptablerange of current tax loss, the optimal interval for the amount of the payment is15%-20%ofthe wage for men, and for women, the result is16%-20%of the wage, and then the tax ratecan be3%when get the pension. On the basis of the results, the paper gives somesuggestion for practicing EET mode.