The Research Of Fund Balance Of China’s Basic Pension System Based On The Adjustment Of The Institutional Factors

Since the old-age pension system begin to build in the1980’s and finally set up thesocial pooling with individual system in the1990’s, the old-age pension system works verywell. At present, the pension insurance’s fund revenue, expenditure and cumulative balancegrowth stably, but the growth rate of expenditure seems go faster than the income in a longrun. Moreover, because of the differences of demographic factor, labor mobility and thedevelopment of economy, the fund revenue and expenditure varies with each other. If we getrid of the financial aid, some provinces has already excessive the balance, there is a hugeburden for the sustainable development of the old-age pension system.In this paper, we first analysis the theory of old-age insurance, and then built the modelof it. Based on the hypothesis which we built up, we simulate the scale of the old-ageendowment insurance fund during2011and2050. Also we take the institutional factors（endowment insurance contribution, replacement rate, the coverage of old-age pensionsystem and the retirement age) into account to forecast its effect on the sustainabledevelopment of the pension system. As the simulation results suggest that if we maintain thepresent status, the social pooling account will excessive the balance around2043. With theincreasing of the ageing people, the fund gap will become bigger. The coverage of old-agepension system has a great effect on the balance of the fund, it will increase the fund incomeimmediately and the fund expenditure afterwards. As for the replacement rate, the lower ratemakes for the sustainable of the system, but be bad for the retired works. Delaying retirementwill put off the fund gap for a few years, but can’t solve the problem of payment imbalance. Ifwe adjust the replacement rate to a proper level and rational adjust the retirement age andcoverage rate, we can get a long time for the growing of the pension fund. Compared thebudget year revenue and expenditures and the accumulative balance we find that the return oninvestment is crucial to the sustainable development of the basic pension system.Based on the research results, we suggest that we should lower the pension contributionsto a proper level,complete the pension benefit formulae, reasonably adjust the retirement age,widen the investment channels to enhance the ability of maintaining and increasing the value,which to promote the sustainable development of the basic pension system.