Research On The Impact Of Delayed Retirement On Pension Balance Under Longevity Risk

Longevity risk is the risk of insufficient pension funding due to the fact that the actual life expectancy in the future exceeds the expected life expectancy based on current historical data.With the improvement of people’s health awareness,the improvement of economic conditions and the continuous progress of medical means and other factors,the life expectancy of the population continues to grow,in the nearly 30 years from 1990 to 2019,the average life expectancy of Chinese residents has increased from 68.55 years to 77.3 years,the average life expectancy has been extended by 8.75 years,and the risk of longevity has become the primary risk faced by China’s pension insurance.The current fertility rate is sluggish,and the elderly live longer and the degree of aging is bound to have a significant negative impact on China’s future population structure,thus having an impact on China’s social welfare system,and the burden of responsibility of the central and local governments on the pension system is increased.Under the increasing risk factor of longevity,if the financial subsidy for pension is not considered,the actual income and expenditure of the basic old-age insurance for urban workers has begun to be insufficient in 2014.If we do not take precautions and actively study the response plan,the self-balancing nature of the basic pension fund for urban workers in China may be difficult to sustain,and the financial imbalance of the national pension insurance system will be difficult to avoid.The basic old-age insurance for urban workers is the cornerstone of China’s basic old-age insurance system,which has a direct impact on the living standards of our people,and whether it can maintain good self-balance in the process of operation is directly related to the confidence of our people to participate in basic old-age insurance,and it is also related to the sustainability of the basic old-age insurance system.Delayed retirement plans are the main means of coping with longevity risks,and the state is currently actively studying the formulation of deferred retirement policies.As the last line of defense to ensure the normal survival level of the national retirees,the small fluctuations in its institutional parameters,work mode and other provisions will have a great impact on the survival level of the general public,so the relevant government departments are very cautious about the reform of the basic pension insurance system.Using the insurance actuarial method,the operation status of the pension insurance system after delayed retirement can be simulated before the implementation of the policy to enhance the scientificity and applicability of the reform plan;the actuarial study of the basic pension insurance operation under the current retirement plan can also be carried out in order to find the defects of the system and hidden risks,and make corresponding suggestions and countermeasures to resolve the risks.Therefore,it is necessary to conduct actuarial research on the basic pension insurance system.The core of this article is the actuarial calculation of the future pension income and expenditure,the most important thing for the actuarial calculation of the pension income and expenditure is to figure out three data,one is the distribution of the number of people of all ages in the future society,which is related to the number of insured people and the number of pensioners,the second is the pension that the active insured people of different ages should pay,and the third is the pension that should be paid to the retired population.Therefore,this paper first quantitatively assesses the longevity risk in China,that is,measures the mortality rate at different ages.Therefore,after summarizing the advantages and disadvantages of various random mortality models,the Lee-Cater model was selected as the prediction model of mortality rate,and then the mortality rate of 0-89 years old by sex from 0 to 89 years old in China from 1994 to 2019 was used to predict the mortality rate of 0-89 years old by age and sex in China from 1994 to 2019.Since most of the mortality data in the statistical yearbook is only 89 years old,so the predicted mortality rate can only be 89 years old,and with the improvement of medical level and other factors,90 years and older people will be more and more,the calculation of pension income and expenditure will also have a non-negligible impact,so the limit age assumed in this paper is 100 years old,so finally the Coale-Kisker model is used to measure the mortality rate at the age of 90 years and above,thereby quantifying the risk of longevity.Data on age-specific sex-based mortality rates aged 0-100 years were obtained for 2025-2050.Based on mortality data and assumed fertility rates,the distribution of the urban population during the forecast period is obtained.Subsequently,according to the changes in government policies,the insured employees are accurately divided,and the differences in the pension calculation methods of different pension accounts are considered,and the actuarial model of the income and expenditure of the basic pension of urban employees is established according to different insured persons and different pension accounts.On the basis of the hypothetical delayed retirement plan,according to the actuarial model and model parameters of the basic pension of urban workers,the impact of normal retirement on pension balance under longevity risk and the impact of delayed retirement on pension balance under longevity risk are calculated,and the calculation and results under these two situations are compared.Comparing the results of the two calculations,it is found that delaying retirement can alleviate the pressure on pension payments,but this effect will gradually decrease as the risk of longevity increases.Based on the findings of this paper,we can see that the delayed retirement policy has limited effect,cannot solve the problem from the root,and needs to continue to explore new and more effective solutions.