The Operation Mode of Social Insurance Fund in China

Combination of social pooling and individual accounts

Its core is to introduce the mechanism of personal account deposit fund system, and the accumulation fund is based on personal account, while maintaining the mechanism of social co-ordination and mutual assistance. Most of the insurance premiums paid by the unit are used to pay the expenses of retirees, and all the insurance premiums paid by individual employees enter the employee's personal account together with some insurance premiums paid by the unit. This model has an incentive mechanism and a supervision mechanism because of the establishment of individual pension accounts. At the same time, it also retains the advantages of social co-ordination and mutual assistance, and integrates the strengths of personal account deposit fund system and pay-as-you-go social co-ordination system, preventing and overcoming their weaknesses and possible problems.