Regional Differences Of The Balance Between Income And Expenditure Of China's Basic Pension Insurance

In 1997,the Chinese government issued a document, named Decisions on the Establishment of A Unified Enterprise Employees'Basic Pension Insurance, to reform the basic pension insurance's financial mechanism from original pay-as-you-go system to a new kind of partial funding system. This new pension system is a combination mode of both PAYG and Funding Scheme. It includes two fund accounts:the Social Pooling Account and the Individual Retirement Account.However,since the beginning of the system was funded, China's basic pension insurance has been managed by the local governments, so there are much differences among all the provinces. As each province is responsible for its own incomes and payments, the fund balance runs extremely different. From year 2014 to year 2015,the number of provinces that have pension fund deficit had sharply increased from two to seven. It is really important for us to research the regional differences on China's basic pension insurance. On one hand, we can learn more about the functional status of the pension system in case of further reforms. On the other hand, we can make a number of targeted measures to resolve the exiting problems.Based on the financial equilibrium mechanisms and other theories about pension system, this thesis analyzes the fund balance of basic pension insurance of China's 31 provinces, autonomous regions, and municipalities. Additionally, it also makes a thorough study to contrast Sichuan, Heilongjiang, Guangdong provinces' fund revenues expenditures and balances. The contents of each chapter are as follows:Chapter ? is the introduction. It mainly expounds the research background and significance, and elaborates the writing ideas, the innovation and the deficiency.Chapter ? is the theoretical basis of this thesis. It describes the financial equilibrium mechanisms of different pension systems, the social security theory, the non-balanced development theory, and the harmonious socialist theory.Chapter III is the core of this thesis. It reflects the current situation and negative effects of regional differences of China's basic pension insurance. First, this chapter studies every province's pension fund in China. Then it makes a comprehensive comparison of Sichuan, Heilongjiang, and Guangdong provinces' fund balance. As a result,this chapter finds out that there are so much regional differences on China's basic pension insurance. Such differences can not only undermine the fairness of the pension system,hinder the building of national-level endowment, but also can exacerbate regional economic imbalance.Chapter IV explains some reasons of the regional differences on China's basic pension fund. It sums up five reasons that make the pension insurance'fund balance so different in every province. Among all those reasons, the pension system's fragmented management and the historical liabilities appear to be particularly important.Chapter V is the conclusions and policy recommendations about this thesis. In order to narrow the development gaps around different provinces in China, and build a more harmonious basic pension insurance, this chapter proposes the following recommendations. First, integrate the 31 provinces' pension contribution standards, establish a special inter-regional fund to support the deficit areas. Second, promote China's basic pension from regional level to national level. Third, establish local supplementary pension insurance system.