At the 2019 annual meeting of China Financial Society and China Financial Forum held on December 21, Zhou Xiaochuan, President of China Financial Society, pointed out that the complexity of pension system is worthy of attention, and China is facing a special aging problem, so we can regard the pension problem as a subject to test our economic foundation and wisdom.
Zhou Xiaochuan mentioned that at present, most countries choose the mode of combination of welfare benchmark (i.e. pay as you go, DB model) and contribution benchmark (i.e. pre financing accumulation system, DC model). The main problem now is that the proportion of pre financing accumulation is too small. There are the following options to encourage accumulation: first, according to the income and property situation, the low-income groups will be paid compensation; second, to guarantee the bottom value-added, to invest and operate the pre raised accumulation funds, and the government will guarantee the bottom rate of return. Third, the government provides guaranteed debt products to support Lao Jin's investment.
From the perspective of the current situation of China's pension management, most pensions are co-ordinated at the provincial level. Some provinces have operation and management mechanisms for managing pensions, while others entrust the national social security fund to manage pensions. This year, the State Council issued a document proposing to expand pension pooling. Zhou Xiaochuan believes that the management of pension pre financing, what kind of management system is more appropriate, and how many pension management institutions are more appropriate, which involves competition and efficiency.
In terms of pension payment mode, Zhou Xiaochuan pointed out that since a person may work in n positions in his life, there are pension payments and personal accounts in n positions. 30 or 40 years ago, due to the lack of electronization, the implementation of n-to-1 payment system was inefficient and uneconomical. Now, due to the development of information technology, the cost has been greatly reduced, and n-to-1 payment can be fully realized.
"Pension itself is a multi-dimensional and complex system, involving a lot of financial content, and the extension complexity of pension will be greater." Zhou Xiaochuan stressed that pension needs more comprehensive research, including the relationship between pension and voluntary savings, compulsory savings, overall planning, as well as the relationship between pension issues and health insurance.
