Abstract
In Chap. 16 of the previous edition of this book China’s National Balance Sheet 2013, we have calculated the funding gap and implicit debts of the old-age insurance for workers and residents in China, made policy simulations to analyze the effects of different reform measures and come to various valuable conclusions. However, in the previous study, only the data for up to 2012 were used, and now it is 2015, we want to know, more than two years later, what are the new Changes in the income and expenditure of China’s old-age insurance? Are the previous estimates accurate and reliable? How big is the difference between the estimates and the new reality?
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- 1.
Before discussion, we must first make clear that unlike the operation of the celestial body, the operation of the economy does not follow a friction-free, definite law, so it is more complex and difficult to make economic predications. Therefore, from the precise sense of mathematics, the predicted results must be “wrong”, what we can do is to ensure that the results will not deviate too far and at least to ensure that there are no serious errors.
- 2.
For example, the government has been claiming to reduce social security premiums so as to reduce the burden on enterprises and workers.
- 3.
This is probably the measure enterprises have taken positively to reduce the wage costs of employees because they found that under the existing conditions it is not cost-effective to pay old-age insurance premiums (for example, the pension fund investment rate is low, there is a great difficulty in the transfer and continuation of old-age insurance, and pension benefits may shrink in the future).
- 4.
As the overall population structure and the population covered by the old-age insurance system are based on the data of the population censuses, but these data are updated once every ten years, which limits our overall adjustment to the basic population data.
- 5.
The nominal GDP index is still used as the discount factor. In the previous study, the data were discounted to 2011, so the data were also discounted to this year for comparison.
- 6.
Therefore, in the Decision of the State Council on the Reform of the Pension System for Employees of Government Organs and Public Institutions clearly states that that “we should gradually establish an independent social old-age insurance system outside of government organs and public institution.”
- 7.
However, perhaps we are worrying too much. For example, the NCSSF has been managing pension funds worth about 100 billon yuan for the southern province of Guangdong since 2012 and has achieved good returns in the past two years, but no question has been made about Guangdong’s part of interest accruing in the personal accounts of the basic old-age insurance.
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© 2018 China Social Sciences Press and Springer Nature Singapore Pte Ltd.
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Li, Y., Zhang, X., Chang, X. (2018). Implicit Pension Debts and Reform of the Old-Age Insurance System. In: China's National Balance Sheet (2015): Leverage Adjustment and Risk Management. Springer, Singapore. https://doi.org/10.1007/978-981-10-7733-3_12
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DOI: https://doi.org/10.1007/978-981-10-7733-3_12
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