According to the third session of the eleventh session of the National People's Congress, talk about your understanding of social security issues?

China's social security reform has been carried out for many years, the results achieved are obvious, but there are many contradictions and difficulties. In my opinion, to resolve the contradictions in the social security reform, to overcome the difficulties in the social security reform, the main thing is to social security reform in the face of a number of major issues for serious reflection, in order to seek unity of thought and understanding.

One, on the social security "debt" problem

Over the years, the so-called social security "debt" problem, is seen as a drag on the social security reform of the historical debt problem. There are three points that need to be emphasized on this issue: 1. The systemic reasons for the social security "debt". The so-called social security "debt" problem has arisen because the urban pension system has chosen the systematic mode of combining social integration and individual accounts ("combining accounts" for short). If the urban pension system had continued along the pay-as-you-go path, with only social coordination and no introduction of individual accounts of an accumulative nature, the problem of social security "arrears" would not have existed.

2. The scale of social security "arrears" depends on the way the system is converted. In particular, the way of transition for the working people when the system was changed. In the case of working people, there are three general ways of transferring the system: one is to allow all working people to stay in the old system. The result is that the "arrears" of social security are zero, because the costs of the system changeover are "diluted" and spread out over several decades to be absorbed year by year, and as long as one can afford to pay pensions, one cannot be considered to have "arrears". ". In this case, social security "arrears" can only be regarded as a contingent debt. The second is to allow employees to choose between staying in the old system or joining the new one. If they choose to join the new system, they will have to set up individual accounts for them, and their previous years of contributions or years of service will have to be commuted, either directly into each individual's personal account or by issuing recognized bonds, as in the case of Chile. Whichever form is taken, it is a visible debt, the more employees choose the new system, the larger the scale of social security "debt". Thirdly, all workers would be forced to join the new system. The result is the largest social security "debt". Because all employees' personal accounts are empty, in order to let the personal account to play its accumulation function, the personal account should be "filled", otherwise, the system design of "united accounts" will fall through.

3. The systematic arrangement for repaying social security "debts". As long as the choice of "combined" pension system model, can not avoid the social security "debt" problem. It should be said that, when the "combined accounts" model was first chosen, full consideration was given to this problem, and three ways of repayment were proposed: one was to be borne entirely by the treasury, the other was to allocate part of the State's assets, and the third was to be absorbed within the system. In view of the poor financial situation at the time and the lack of operational means to allocate State assets, the third option was finally chosen.

The so-called internalization of the system was based on two main institutional arrangements: one was to maintain a higher rate of enterprise contributions, so that enterprises would contribute to the payment of retirees' pensions as well as to the personal accounts of active employees. The second is to design a transitional pension specifically for the "middle man" (the transfer of employees), the years of service before the transfer into a coefficient, the use of an additional transitional pension, the transfer of personal accounts before the "empty" part of the account to be compensated.

The question now is, why is the social security "debt" problem dragging down the social security reform? I think there are at least three reasons:

First, insufficient understanding of the conditions for the implementation of the "united accounts" system model. In the past, we have emphasized more on the advantages of introducing the individual account system, striving to achieve the "best of both worlds" in the arrangement and design of the system, giving full play to the strengths of social integration and reflecting the advantages of the individual account. However, it is clear that not enough attention has been paid to the introduction of the individual account system, especially to the basic conditions for the realization of individual accounts.

Secondly, there has been little consideration of how to reduce the size of the social security "debt". From the pension system in the transition of the transition of the working people, in fact, the choice is the social security "arrears" in the largest scale of a way, that is, forcing all the working people to participate in the new system. At the same time, in repaying the social security "debt", the emphasis was placed on internal digestion, attempting to gradually absorb the historical debt by financing the new system.

Thirdly, the timing of the implementation of the "combined accounts" system was not well grasped. The model of the "combined accounts" system was established in 1993, the system was designed in 1994, and its implementation took place after 1995. It was precisely from then on that the operating conditions of state-owned enterprises as a whole began to go downhill, especially since 1997, when more and more state-owned enterprises withdrew from the market and employees were laid off, with the result that the number of insured enterprises and employees who were able to make normal contributions fell sharply, while the number of pensioners rose sharply, and the system design objective of trying to pay off the social security "arrears" through the maintenance of a higher rate of contributions was difficult to achieve. "

The system's design goal is difficult to achieve.

Since July 2001, the state chose Liaoning province to carry out a pilot social security reform, one of the contents of the pilot, is to do the real personal account, but the account size has been reduced, that is, from the original 11% of the employee's salary down to 8%. Since 2004, Jilin and Heilongjiang provinces have also joined the pilot, but the size of the individual accounts has been further reduced to 6 per cent. In view of the pilot to do personal accounts, is to give financial support to the central government as a condition, and thus to do personal accounts has generated a great deal of controversy, those in favor of the opponents and opponents of divergent views, tit for tat. Some scholars even take a different approach, advocating the implementation of a "nominal account system". In this regard, I believe that first of all, we should reflect on the "united accounts" system itself. Even though "consolidation of accounts" is an optimal institutional arrangement, but if it can not make a proper treatment of social security "debt", it only shows that the conditions for the implementation of the system is not mature, and further entanglement is of little value, and will even delay the social security reform. The timing of the social security reform.

Two, on the problem of population aging

Population aging is an important issue of social security reform has always been particularly concerned about, but also one of the reasons for the reform of the urban pension system to introduce the individual account system. When it comes to population aging, scholars often talk about three words, i.e., large base, fast speed, and getting old before getting rich. The aging of the population to make early preparations, to do "rainy day", this is not disputable. However, the tendency of "one-sidedness" and over-exaggeration on this issue, which will mislead the social security reform, has to attract attention and reflection. In my opinion, there are three points of view that need to attract enough attention:

1. Population aging is not terrible. Two years ago, I had put forward a point of view that the impact of population aging on the urban pension system, far less than the structural adjustment in the early retirement so big. Because a large number of employees retired early, will inevitably cause the pension funds on the reduction of income and increase expenditure, and early retirees to receive the pension of the years. Will be extended by 5 to 10 years or even longer, further increasing the pressure on pension funds.

According to the Ministry of Labor and Social Security estimates, in 2000 alone, due to early retirement caused by the pension fund to reduce revenue amounted to 2.4 billion yuan, while the increase in expenditure amounted to 8.2 billion yuan, the two total of 10.6 billion yuan, accounting for about 5% of the year's pension expenditure.

Recently, I have seen a scholar's view, put forward in 2002, that population aging will not have too serious an impact on the urban pension system. The basis is: into the aging society, China's old-age support burden is increasing, but the burden of juvenile support is reduced accordingly, that is, there is a relationship between old age and young people's support for each other. For the working-age population, the total dependency ratio has not increased much. It is estimated that in 2040, the year of the most serious population ageing in China, the total dependency ratio will be 0.545, an increase of only 14 per cent over 1998. If the factor of population urbanization is taken into account, the total urban dependency ratio will be 0.468 in 2040, which is even smaller than the total dependency ratio in 1998 under the national population status.

2. China has only just crossed the threshold of population aging. According to the fifth national population census, in 2000, the proportion of people aged 65 and over in China's total population was less than 7%, with 7.35% in rural areas and only 6.30% in urban areas. Even at the national level, the population has just crossed the threshold of aging.

China's current level of population aging is equivalent to that of the United States in 1935 when Social Security was introduced. At that time, the proportion of the elderly population aged 65 and above was also 7%, but now the proportion has risen to 12%. According to some data, after more than 70 years of development, about 90 per cent of older persons in the United States have been covered by Social Security. For one third of the elderly in the United States, social security pensions are their only source of income; the other two thirds of the elderly in the United States, social security pensions are the main source of income. Without Social Security, poverty among the elderly in the United States would be as high as 50 per cent, compared with 11 per cent at present. Our country has been covered by social security for the elderly, at present only about 20%, the vast majority of the elderly, especially in rural areas, is outside the social security, to solve the problem of poverty, can only rely on social security outside the means of redistribution.

Social security can not trace the past, but can look to the future. According to population projections, the peak of China's aging population will come around 2030 and last for more than 20 years. During this period, the 300 million people born during the second peak of fertility (1962-1973) after the founding of New China will gradually enter the ranks of the elderly, while the population born during the first peak of fertility (1953-1957) will enter the stage of advanced age. If a social security scheme is implemented now for those who are now in their prime, it will effectively prevent old-age poverty at the peak of population ageing. This is undoubtedly a strategic issue. Since there is a time lag of 20 to 30 years, even if a social security system is set up from now on, social security will have matured institutionally by then and will be fully capable of coping with the peak of population aging.

3. The pay-as-you-go system can also cope with population aging. In recent years, when it comes to coping with the aging of the population, everyone always focuses on the individual account system of fund accumulation, and always "disdain" the pay-as-you-go system. But some scholars calmly pointed out that, in dealing with the aging of the population, the pay-as-you-go system also has advantages, and even incomparable advantages of individual accounts.

First is the burden of contribution. To maintain the same replacement rate, in the old age burden coefficient of less than 25%, the pay-as-you-go system's contribution rate is lower than the accumulation system. According to the calculations of the former National Commission for Reform and Development, under the fund accumulation system, a person contributes for 38 years of his or her life, assuming an investment rate of return of 7.5 per cent, an average remaining life of 18 years, and a contribution rate of 16 per cent of salary income per year, which results in a replacement rate of up to 63 per cent. However, in a pay-as-you-go system, to achieve the same high replacement rate, if the old-age burden coefficient is 20 per cent, the contribution rate is only 12.6 per cent; if the old-age burden coefficient is 25 per cent, the contribution rate is 15.75 per cent.

The second is the risk of old age security. Fund accumulation system, pension replacement rate is subject to the rate of return on investment, only when the rate of return on investment exceeds the rate of growth of wages, the insured can get a higher treatment, and the rate of return on investment depends on a variety of factors, especially the capital market situation.

But in the pay-as-you-go system, the pension replacement rate depends only on the current year's contribution status, and is not affected by interest rates and other factors. At the same time, the level of pension benefits under the pay-as-you-go system is higher than that under the fund accumulation system, which is more favorable to the elderly in the face of rising wages.

Third, on the issue of drawing on international experience

Like other aspects of reform, social security reform also has the problem of drawing on international experience. It should be admitted that the tendency of privatization of social security in the international community, as well as the introduction of personal accounts in some countries' pension systems, have had a great impact on the idea of social security reform in China and the choice of system model.

Over the years, there are two tendencies that deserve attention in the social security reform in terms of drawing on international experience: one is to draw on the experience of other countries to learn only one part of the experience, not all of it; the other is to draw on the experience of other countries to focus only on the conclusion without examining its background and environment. These two tendencies are particularly obvious in the reform of the pension system:

1. Focusing only on the target model and ignoring the way of transfer. Chile has been hailed as a model for the introduction of personal accounts in the pension system, and its pension system reform can be described as a "new generation", but the way of transferring the system has been quite mild. In the treatment of the old and new systems, Chile did not immediately use the new system of full accumulation to completely destroy the old system of pay-as-you-go, but rather to make the two systems exist for a long time ****, and let the old system die out naturally in a few decades time, the new system to thrive; in the treatment of the transition of the incumbents of the Chilean system did not take a coercive approach, but rather to give them the right to choose, encouraging the incumbent to choose the new system, but also allowed to stay in the old system. Chile did not take a coercive approach in dealing with staff at the time of the transition. In contrast, in Chile, there is only a distinction between the old and the new in the transition, and there is no separate "middle man"; those who stay in the old system are the old, and those who join the new system are the new.

In recent years, more and more countries have introduced personal accounts into their pension systems. However, on the one hand, very few of them have put individual accounts at the statutory social security level, and on the other hand, even fewer of them have immediately "destroyed" the pay-as-you-go pension system by using the individual account system of full accumulation. In Australia, where occupational pensions in the form of individual accounts have been vigorously pursued, with increasing numbers and size of participants, the Australian Government has not declared the immediate demise of the household survey-based public **** pension system for all older persons.

On the contrary, China's pension system reform, in the operation of too much "too much haste", and can not wait to complete the system in a snap of the fingers to change track. In the way of conversion, do not allow employees to choose, are driven into the new system. Since the Government is unable to bear the cost of the conversion, it has been forced to set up the employees who are in the process of conversion as "middlemen" and to seek transition by means of commuted transitional pensions. The result has been that employees are afraid of the new system, and everyone is in a state of fear and panic, trying desperately to catch the last train of the old system in order to cross the threshold of early retirement.

2. Focusing only on the success of the fund accumulation system, while ignoring the success of the pay-as-you-go system. The social security system that has been in place in the United States since 1935 is undoubtedly a pay-as-you-go system in nature. Although the proportion of the elderly population in the United States has risen from 7 per cent at the time of its introduction to more than 12 per cent at present, the social security system has been operating safely for 70 years. According to American actuarial calculations, its social security fund would not be in deficit until 2017 and would not be depleted until 2041. With a low social security contribution rate (15.3 per cent), the United States has been able to extend social security benefits to more than 43 million people, including 90 per cent of the elderly, more than 7 million survivors and more than 6 million disabled persons and their families. This is an example of the success of the pay-as-you-go system. Its success has at least two lessons: first, social security is never "greedy for everything", all-encompassing, but focus on the elderly social security, committed to preventing poverty in old age; second, social security belongs to the federal affairs, financing the implementation of the national coordination, management by the federal government is responsible for the unity of the federal government.

In addition, the Americans on the privatization of social security discussion is in full swing. In the discussion, there are those who advocate the introduction of individual accounts, but there are also those who oppose it. In this regard, it should be introduced comprehensively, not "one-sided", not to mention arbitrary "cut". In particular, the conclusions should not be viewed in isolation from the background and context of the discussion.

Fourth, on the social security of urban and rural convergence

Since the founding of New China, social security has always been divided between urban and rural areas, with urban areas having urban institutional arrangements and rural areas having another set of institutional arrangements.

In 1993, the central government further clarified the need to "differentiate between urban and rural areas" in the reform of social security.

After more than 20 years of reform and opening up, our country no longer has a dual structure of urban and rural areas, but a triple structure of urban and rural areas, that is, there is a special group of people between urban and rural areas, including rural and township enterprise workers, rural migrant laborers, and landless peasants. This is a large group, not only in absolute numbers, but also in terms of annual growth. According to statistics, in recent years, the number of people employed in township and village enterprises has basically remained at 130 million. It is estimated that there are now more than 100 million rural migrant workers, with an annual increment conservatively estimated at about 4 million; and about 40 million landless peasants, with an annual increment of about 2 million. These three teams together, the number of people, has exceeded the number of urban employment.

The shift from an urban-rural dual structure to a triple structure is in line with the laws of industrialization and urbanization. In line with this, social security in fact, we need to "three-line" combat, that is, in the urban social security, social security in rural areas at the same time, but also to do a good job in the combination of urban and rural areas of social security. It should be recognized that, in the face of rural areas, in the face of urban and rural areas, social security highlights its system of innovation and reserves of serious deficiencies:

1. Social insurance has become a basket, all the people are loaded into itj At present, in the country, in addition to Shanghai and other very few areas to take a "tailor-made" approach for migrant workers and other specific groups to make different from social insurance. At present, throughout the country, except for a few regions such as Shanghai, which have adopted a "tailor-made" approach, making institutional arrangements for specific groups such as migrant workers that are different from those of social insurance, the vast majority of regions stick to the traditional thinking of treating social insurance as a basket into which all groups of people are loaded. Social insurance was originally designed for city dwellers and was only applicable to organized employment, but it has been extended to migrant workers and landless peasants. Both rural migrant workers and landless peasants originally had a beautiful vision and eager desire for social security, but in the face of the red tape of social insurance, the slightest approach, touch, that is to produce a sense of loss that can not be reached, and even alarmed at being discriminated against, deprived of, and then to take a respectful and distant, retreating from the attitude of the three.

2. Using urban social insurance to promote social security in rural areas, urban social insurance "to the countryside" tendency is obvious. In recent years, in rural areas to carry out old-age insurance and a new type of cooperative medical care pilot, can be seen everywhere in the back of urban social insurance. In terms of system design, they are basically modeled on the urban pension and medical insurance models, with similar institutional arrangements. For example, the pension age is modeled on the urban retirement age, and the system model chooses the individual account system of full accumulation; the new cooperative medical care is also going to engage in individual accounts, and also to design the ceiling line. In addition, according to media reports, the Ministry of Labor and Social Security has formulated a set of rural social security programs, suggesting that the central government should allocate 20 billion yuan annually to support the central and western regions and establish a universal social security system for 800 million farmers. Relying on the central government as an external force to promote the cause of social security in rural areas, it is worth pondering whether the social security established accordingly is sustainable.

Getting the social security of urban and rural convergence, by no means means means to urban social insurance as a benchmark, and then realize the social security of urban and rural docking. Urban social insurance is not yet qualified to do so, because it itself has exceeded our national conditions and national strength, there are major flaws in the system arrangements and design: first, social security has been dismembered, was "reduced to zero". First, social security has been dismembered and "reduced to zero", i.e., it has been transformed from a comprehensive system into a decentralized system. Scholars studying China's social security, seems to have been built in 1951, the labor insurance system "disregarded", which can not be said to be a kind of sadness.

The social insurance currently in force is related to the labor insurance of more than 50 years ago. However, there is a fundamental difference between the two in terms of institutional arrangements. Labor insurance is a comprehensive institutional arrangement, which combines old-age pension, medical care, work-related injuries and maternity in a single system; however, social insurance breaks down the labor insurance system as a whole into disjointed parts and components, old-age pension, medical care, each collecting its own premiums, each determining its own treatment, each using its own funds, and not interlinked with each other.

Secondly, the design of the social insurance system is "greedy for the whole". Social insurance in developed countries includes five major types of insurance, namely, old-age pension, medical care, unemployment, work-related injuries and maternity, etc. However, most of the developing countries will do what they can within their means, and not all of the five major types of insurance have been set up. This is not the case in our country, which has all the five major types of insurance. Moreover, even in individual developed countries, social security was introduced in a selective and focused manner, covering only the most vulnerable stages of a person's life (e.g., after 65 years of age) and providing only the most critical items (e.g., old age and medical care). This is not the case in China, where every stage of life after employment is taken care of, and even young people as young as 35 years old can apply for early retirement and receive a monthly pension; and medical insurance is taken care of regardless of major or minor illnesses, and regardless of whether they are old or young.

Social insurance system arrangements from unified to decentralized, from the integrated to sub-items, the most direct consequence is to cause the insurance funds can not help each other, social insurance premium rate "remains high", the system threshold is too high. At the same time, insured enterprises and individuals have a choice, and it is difficult to expand coverage. In addition, the design of the system is "greedy for the whole", exacerbating the above contradictions.

In view of this, social insurance must not be used to integrate urban and rural areas, but should do a good job of social security system innovation, different from the social insurance system arrangements and design, leading the construction of urban and rural social security.

Fifth, on the positioning of social security goals

Over the years, China's social security reform is like entering a "minefield", difficult to move, difficult to move, inadvertently stepped on the landmines, triggering social conflicts. The reason for this situation, in addition to reviewing and reflecting on the current arrangements and design of the system, but also to make a re-examination of the target positioning of social security.

From the positioning of social security goals, the biggest problem over the years, is to over-emphasize the social security for the state-owned enterprise reform supporting services, the result of the social security into a "closed-loop system". Objectively speaking, social security reform has its origins in the reform of state-owned enterprises. Beginning in 1983, the social integration of retirement costs, the purpose is to solve the uneven burden of old age among state-owned enterprises; 1991 pension calculation method reform, from state-owned enterprises to activate the internal distribution of wages in the floating part of the increase, but for the future calculation of old-age treatment, had to retain the "file salary"; into the turn of the century, the focus of perfecting the social security system in cities and towns, the social security system should be a "closed-loop system", the result is that social security has become a "closed-loop system". At the turn of the century, the focus of improving the social security system in cities and towns, on the restructuring of state-owned enterprises, reorganization, mergers and bankruptcy services.

Social security reform to serve the reform of state-owned enterprises, which in itself is indisputable, the problem is that: the new social security system arrangements and design, too entangled in the past, but can not look to the future; focusing on the state-owned enterprises, but can not be oriented to the whole society; over-emphasis on dumping the baggage, and do everything possible to bring down the future level of old-age pensions and health care and other treatments, and ignored the future of the inhabitants of the result of unstable expectations. The future expectations of the residents are not stable.

In my opinion, the social security reform should include three parts: first, the design of a new system that is different from the old social security system, the new system must be absolutely focused on the future, for the whole society, in the institutional arrangements must not be designed to fulfill the promise of the old system. Secondly, the door to the old social security system should be closed, so that those who are inside the door can come out (join the new system), but those who are outside the door can no longer enter. The third is to choose a safe way of transitioning from the old social security system to the new one, designed primarily for those who have already been shut into the door of the old system.

The institutional arrangements and design of the new social security system must be future-oriented and community-oriented, not generalized. The future of social security, the goal should be located in the old age social security, aimed at systematically preventing poverty in old age, the implementation of the population should focus on a number of generations born after the 1980s. According to population projections, China's working-age population (15-59 years old) is not only huge in absolute terms, but also from now to 2025 will maintain a certain growth. 2010, China's working-age population of about 920 million people, in 2020 about 940 million people; working-age population of the average annual growth rate of 1.23% in 2000-2010, 0.54% in 2010-2015, 1.23% in 2010-2015, and 0.54% in 2010-2015, the average annual growth rate of 0.54% in 2010-2015, and the average annual growth rate of 1.23% in 2000-2010 and 0.54% in 2010-2015. The average annual growth rate of the working-age population was 1.23% from 2000 to 2010, 0.54% from 2010 to 2015, and 0.06% from 2015 to 2025. This is a valuable asset for the innovation of our social security system.

Based on the above design concepts, I propose a new social security system that is low-threshold, open-ended and sustainable, with the following features:

One, fewer and more sophisticated programs, including only two major programs: old-age pension and medical care, with old-age pension programs that include survivors' and disability protection.

The second is the bundling of programs, which integrates the two major programs of old-age and medical care together, and does not allow participants to take a separate approach to enrollment.

Thirdly, only the age of entitlement to social security benefits (65 years of age) is set, not the retirement age, and it is entirely up to the participant to decide when to stop working.

Fourthly, the cost of participation is low, with the rate of contribution limited to 15 per cent of wage income, with the insured unit and the individual each bearing half the burden, and the unorganized employed person bearing the full burden.

Fifthly, participation is flexible, with only a specified number of years of contributions, or the number of years of contributions converted into points, allowing intermittent contributions.

Sixth, there is no individual account, and the system is nationally coordinated and pay-as-you-go.

I suggest that the above new social security system be implemented on a trial basis for those who are not yet covered by social insurance, including employees of organizations and institutions, migrant workers, landless peasants, township and village workers, self-employed people and freelancers. However, for those who had been covered by the old social security system, such as employees of institutions and organizations, a special way of transferring the system should be designed.

Sixth, on the social security "redemption"

In recent times, the reform of institutions to give people a "call for" feeling. It is reported that the State Council is urgently formulating the overall program.

While the overall national program has not yet been issued, but in some industries (such as scientific research, culture) and some areas (such as Zhejiang, Jiangsu), the reform of institutions has been carried out. In the process of promoting the reform of institutions, we strongly feel that social security is a thorny issue that can not be bypassed, often touched by the "head broken blood". Particularly noteworthy is that was popular in the monopoly of state-owned enterprises in the industry, "buy off the length of service", "identity replacement" and other means, has quietly appeared in the reform of institutions, some of which were diverted into the member to receive a certain amount of compensation with the original unit to terminate the labor (personnel). The labor (personnel) relationship with the original unit. I call this phenomenon social security "redemption". In this regard, the following issues need attention:

1. Social security "redemption" occurs in the context of the social security reform of institutions has not yet introduced a national program. Since the founding of New China, institutions have generally practiced the same social security as administrative organizations, unlike enterprises. In recent years, with the gradual establishment of social insurance systems for enterprises, there has been a trend towards "parallelization" of social security reforms between institutions and enterprises, with the basic idea being that, at the level of the basic system, institutions and enterprises are to implement a unified social insurance system, supplemented by special measures such as additional pensions and medical benefits. At present, the "convergence" between institutions and enterprises in terms of theory and system design has been completed with regard to the two systems of medical care and unemployment, and has been implemented nationwide. However, in the reform of the retirement pension system, the "integration" has not been smooth. To date, there has been no nationwide "harmonization" programme, and only pilot reforms have been carried out in some areas. As of the end of 2002, the number of participants in the "harmonization" of the pension systems of institutions and enterprises was 34 per cent of active employees and 31 per cent of retirees; the proportion was even lower in administrative organs, with 24 per cent of active employees and 17 per cent of retirees.

2. There is a potential risk of social security "redemption". Mainly in the future of social security: first, old age. If the original unit has never participated in the pension insurance, even after the streaming of the new unit or in the name of the individual to pay pension insurance premiums, the contribution years may be counted from zero, the past years of service in the institutions are not regarded as years of contribution. The second is medical care. There may be three kinds of situations, one, after being shunted to find a new work unit, but the new unit does not pay medical insurance premiums; two, after being shunted to self-employment, engaged in self-employment, the local social insurance agency does not accept to participate in the medical insurance in the name of the individual; three, after being shunted to remain unemployed, can not participate in the medical insurance. In either case, the displaced workers will be left out of the medical insurance.

In the past, the country's commitment to social security for employees of institutions, is linked to employment, which is often referred to as employment, wages and social security trinity. Now, the reform of institutions to take the identity replacement and other ways, not only can end up on the employment of the "iron rice bowl", but also to buy social security commitments, the desire or starting point is good, but the effect may not be good. In dealing with social security commitments, there are always two options: one is to buy them by means of identity replacement, and the other is to carry out social security reforms. In layman's terms, it's a question of whether to give cash or to give expectations.

I tend to favor the latter option. At the same time, in the choice of social security system model, the reform of institutions are also facing two choices: one choice is to be integrated into the current social insurance system has been molded, the other choice is to re-design a set of social security system is different from the social insurance new system.

My view is that it is not appropriate to incorporate institutions into the social insurance system. The reasons are:

(1) The cost of social insurance is too high. According to the system set up, the social insurance participation rate accounts for more than 40% of the wage income, of which the participating units to bear the rate of more than 30% of the total wages. Whether an organization is transformed into an enterprise or retains its nature as an enterprise, it has to pay a large sum of money to join the social insurance scheme.

(2) The level of social insurance treatment is on the low side. In the retirement pension, in accordance with the institutions of the pension scheme, than the pension insurance system for a large chunk of the pension, less than half, or double; in the medical treatment, the level of treatment will be reduced from 90% of the public health care to about 65% of medical insurance.

(3) social insurance insufficient capacity. At present, the ratio of working personnel and retired personnel in public organizations is about 4:1, that is, four people contribute to the support of a retired person. However, with the reform of institutions in full swing, once the early retirement and identity replacement is spreading, is bound to exacerbate the imbalance between income and expenditure of social insurance funds, all levels of finance have to increase subsidies.

In view of this, I suggest that, in the formulation of social security reform program for institutions, another way or another stove, on the one hand, redesign a set of social security system is different from the social insurance, on the other hand, specifically for the design of the new system of institutional workers transition program. On the former I have been described in the fifth part of this article, the following focus on the latter:

In the retirement pension system, all the employees only set up the old man and the new man, there is no "in the man", either to stay in the old system, or to join the new system, allowing employees to make a choice. If they chose to remain in the old system, the retirement age and pension rates would remain as they were, but it could not be ruled out that in the future the State would take "small steps" to raise the retirement age, for example, by adding a few months each year, while the pension rates would be adjusted on the basis of the average number of years prior to retirement. The State should encourage active employees to opt in to the new system. For example, participating organizations should be allowed to set up individual pension accounts in addition to social security for those who join the new system, with tax exemptions for contributions within a certain percentage of salary income.

On the transfer of the medical system, the retired and the employed are treated separately. The level of medical treatment for retired persons will not be reduced, and the costs will be met by the new social security system, but a management system and methods must be devised to effectively prevent the excesses and wastage of medical services. The medical care of active employees is dealt with in two ways: from the time they reach the statutory retirement age, they enter the new social security system; before they reach the statutory retirement age, they are covered by the purchase of commercial medical insurance, and the costs are borne by both the organization in which they are employed and the individual ****. In order to ensure the smooth transition of the medical system, the State should build a new platform for health care and medical services, distinguishing between common diseases, chronic diseases and serious and difficult diseases, and adopting different medical services.