Why should the state engage in endowment insurance? Is it to collect taxes from the rich and subsidize the poor?

After more than four years of research and demonstration, the top-level design scheme of endowment insurance is nearing completion.

According to Caijing reporter, at present, all parties have reached a preliminary understanding on the overall plan, such as the national overall planning of basic pensions, the transfer of state-owned assets to social security, and the postponement of retirement age. However, the inevitable future of individual pension accounts is still controversial.

In China, the personal pension account is formed by 8% of the monthly salary of employees, and the rights and interests are owned by individuals, which is equivalent to a kind of compulsory savings; The pension paid by the unit will enter the social pooling part, and when it is received, it will emphasize the economy and eat "big pot".

How much some employees in personal accounts can receive after retirement is closely related to the amount of savings in their accounts.

Personal account is a new thing introduced in the last round of social security reform more than 20 years ago. At that time, the national social security system was initially established, but for various reasons, personal accounts were in an empty state for a long time. In the past few years, the policy has not made clear the direction of personal account reform. The Third Plenary Session of the 18th CPC Central Committee decided to only make a statement of "adhering to the basic old-age insurance system combining social pooling with personal accounts and improving the personal account system".

So far, there are different opinions on how the change will affect the future life of the insured.

Personal account change

Different from most countries, when China established the basic pension system in the 1990s, it adopted the mode of combining social pooling with individual accounts. About 20% of the employee's salary paid by the unit goes into the overall account, and 8% paid by the employee himself goes into the personal account.

From the perspective of policy design, the two parts correspond to two systems and different ideas. Social pooling corresponds to the pay-as-you-go system, that is, employees pay for retirement, and their deposits are not left in their accounts, but are directly distributed to current retirees; Personal accounts correspond to the accumulation system, that is, employees save their own money and deposit it in bank accounts as future pension assets.

When employees retire, the pension they receive is also divided into two parts, corresponding to different calculation and payment methods. The distribution of social overall planning is mainly related to factors such as the average social wage. Although reference is made to factors such as payment period and payment amount, the correlation with personal payment behavior is far less obvious than that of personal account. The latter is equivalent to compulsory deposit, and the calculation and payment method is simple, that is, the accumulated principal and interest in the account is divided by a fixed number of months and paid monthly. For example, for people who retire at the age of 60, the monthly payment is divided by the principal and interest 139, which embodies the principle of "pay more and get more".

China's unified account system is intended to have the advantages of both systems: the pay-as-you-go system corresponding to social overall planning has a strong secondary distribution function, which helps to narrow the gap between the rich and the poor; The clear accumulated property rights corresponding to individual accounts can encourage people to pay more.

However, the two systems also have their own shortcomings, which were not paid enough attention earlier: the pay-as-you-go system is under great pressure from the aging population structure, the proportion of the elderly population is rising, and the pressure on young people to pay fees is also rising, facing sustainable risks; The pressure of accumulation system comes from maintaining and increasing value, such as poor operation, which is equivalent to the depreciation of people's pension money.

At the beginning, the fairly beautiful institutional assumption did not fully play its expected role.

Because the people who retired or will retire before the establishment of the system did not save any money for the old-age care, and the government expected them to get enough old-age care, the task of repaying this historical debt was transferred to the later payers, which is also the reason why the contribution rate of domestic old-age insurance is as high as 28%. This can also explain that during the economic downturn, calls for reducing social security costs have appeared frequently, but the steps to reduce the pension insurance rate are cautious.

Similarly, due to this historical debt and the increasing proportion of the elderly population, the overall account is not enough to be distributed to retirees, so we can only misappropriate funds from personal accounts to fill the hole.

In this way, the personal account used for accumulation has no actual funds, only one payment record. Therefore, the combination of raising accounts is actually similar to the old road of the original pay-as-you-go system.

If you simply go back, it's not terrible. The problem is that the amount of fees in personal accounts is getting bigger and bigger, and eventually it is necessary to pay back the account with real money.

Li Zhen, director of the Institute of Social Security of Renmin University of China, estimated that if the annual growth rate of public budget revenue and personal account bookkeeping scale is maintained at 20 15, by 2024, that is, seven years later, the personal account bookkeeping scale will exceed the public budget revenue.

This is quite puzzling, and there is not much time left for people to come up with a solution.

Policymakers noticed this problem many years ago and tried to solve it. Since 2000, Liaoning, Jilin and Heilongjiang provinces have been listed as pilots, and personal accounts have been gradually established, that is, funds have been injected into personal accounts that were originally in deficit. In 2006, the pilot project was expanded to eight provinces and cities including Tianjin, Shanghai and Shanxi.

However, contrary to expectations, the small amount of funds accumulated in Liaoning pilot was once again misappropriated for the current pension payment. Since then, the reference to "implementing personal accounts" has also disappeared in subsequent policy texts, and there has been no substantial progress in the reform of personal accounts.

Three possible reform paths

Should we keep the poor performance of unified accounting, or simply return to pay-as-you-go

At present, there are three reform ideas: maintaining the existing system unchanged, or appropriately reducing the proportion of personal accounts; Implement the "separate account system", that is, transfer part or all of personal accounts to the supplementary old-age insurance system; The nominal account system will be implemented, and the proportion of individual accounts will be expanded to 16% of the "big account" to promote the transition from the pension system to the accumulation system.

Different ideas may bring different results.

If the original system remains unchanged, some system parameters must be adjusted to cope with the aging payment pressure. For example, extending the retirement age and extending the minimum payment time of endowment insurance. With the improvement of life expectancy, the current practice of receiving pension only after paying 15 years insurance is bound to change.

In recent years, the idea of "dividing accounts" has become more and more active. The so-called supplementary pension mainly refers to the enterprise annuity system established by some enterprises for employees. Some scholars assume that the government should establish a new pension account for all citizens, and encourage enterprises and employees to deposit money into the account through tax incentives. This system design has been practiced abroad for a long time. For example, in American individual retirement accounts, people can easily check the deposit records and balances of their accounts. The ownership of supplementary pension is very clear, that is, it belongs to individuals, and individuals have certain choices about how to invest. But the biggest difficulty of this idea at present is that the enthusiasm of enterprises and governments is not high. In 20 16, only 23.25 million people had enterprise annuities.

The bigger difficulty is that the funds transferred to supplementary pensions must be realized, which will bring financial pressure or force the government to find new sources of income.

Huang Hong, vice chairman of the China Insurance Regulatory Commission, publicly stated at the end of June that the pilot of personal tax deferred commercial endowment insurance will be formulated and completed as soon as possible. The plan points to some specific commercial pension products, rather than establishing a new pension account. This may indicate that the idea of "split accounts" has not been adopted by decision makers.

The establishment of nominal account system is based on the reality that personal accounts are empty. In this design, employees still deposit money into personal accounts, but there is no real money in the accounts. All contributions are used to pay the pensions of current retirees, and the contributions and income of employees are used as the basic records of future pension payment, so as to strengthen "pay more and get more" and encourage people to pay more. In addition, with the accumulation of funds, it will gradually be transformed into an accumulation system to improve the sustainability of future pensions.

In order to arouse people's enthusiasm for payment, it is necessary to expand the proportion of personal accounts, for example, to set aside 8% from the unit payment, so as to expand the personal accounts to 16%, which is the so-called "big account" reform plan.

This method can avoid the huge cost of direct conversion to real account in a short time, and at the same time, because there is no real account fund in the account, it can avoid the pressure of investment and operation under the imperfect domestic capital market.

Concerns about capital operation are not just China's problem.

Around 200 1, whether to introduce personal accounts has caused discussions in the United States. Dorothy Simon, vice president of the American Association of Retired Persons, told Caijing that after the economic recession in 2008, no one came to discuss this issue because people were unwilling to take financial and economic risks. But she reiterated repeatedly that in order to get a suitable old age, people must start their own savings plan as soon as possible.

For all countries, it is very cautious when considering whether to introduce personal accounts into basic pensions.

Before 1980s, the traditional pay-as-you-go pension system was internationally recognized. In the 1980s and 1990s, the pension system was reformed one after another, and the personal account system attracted widespread attention. However, only the central provident fund system established by Singapore 1955, the personal account system of private competition management established by Chile 198 1 and the nominal personal account system established by Sweden in the 1990s are typical and lasting.

The basic pension in developed countries such as the United States and Germany still adopts the pay-as-you-go system. All the contributions of employees and enterprises are paid into the overall account, the pension is paid by the social overall fund, and the insufficient part is allocated by the finance. This method is easy to manage, but it is easy to make the financial burden.

As the country with the highest aging population in Europe and the birthplace of the old-age insurance system, Germany's pension payment is also facing a deficit crisis, with the number of recipients rising and the level of treatment declining. Although remedial measures such as delaying retirement age and cutting welfare expenditure have been taken, the situation is still grim. Since EU countries are not allowed to provide pensions by borrowing, Germany may face the choice of reducing the replacement rate or increasing the contribution ratio.

The domestic large account scheme can avoid the trouble of fund operation, but it will bring no small challenge to the existing pension management system. Caijing reporter learned that in the past few years, the plan was once recognized by the decision-making level, but it was later shelved.

Which scheme should we choose?

For China, the special feature of the old-age insurance reform is that "super aging" is coming.

Heng, a professor at the School of Public Administration of Northwest University, pointed out that from 20 15 to 2050, the proportion of the elderly population in China will continue to increase, and the aging rate is much higher than that in other countries. The total fertility rate has been low for a long time, but the life expectancy is increasing, so the urgency of perfecting the system is increasing.

Among the two options of expanding personal account, maintaining the status quo and improving the sustainability of pension through parameter adjustment, the difference in ideas is the most significant: the former pays more attention to actuarial fairness and emphasizes that the enthusiasm for payment is positively related to the treatment; The latter emphasizes the economic effects between different social groups.

In the view of some scholars, the pay-as-you-go system closely links the personal pension level with the average social wage, and has the function of income redistribution. If the "overpayment and overpayment" of personal accounts is particularly highlighted, the original disparity in income distribution will also be widened, which is more beneficial to the rich, thus deviating from the original intention of social security.

Song Xiaowu, chairman of the China Economic Reform Research Foundation, is also worried that if the reform is not conducive to the poor, the return rate of personal accounts is not high, and the rich do not take the initiative to pay fees, the whole system will be embarrassed.

Chile, as a benchmark for establishing a pension personal account system, is in a dilemma. 198 1 this country has completely reformed the original pay-as-you-go system, with the government bearing the transition costs and establishing a completely accumulated personal account system.

At present, Chile's personal account system has accumulated a pension fund balance of $654.38+070 billion, equivalent to 70% of Chile's GDP. However, Yang Jun, an associate professor at the School of Labor and Human Resources of Renmin University of China, said that personal accounts in Chile actually did not give full play to the role of incentives, and the coverage rate was not high.

Even if citizens are compulsory to participate in the old-age insurance, the average coverage level in Chile from 2009 to 20 16 is only 56%, and the contribution period of employees only accounts for about half of their employment years, which will actually lead to the insured people not getting enough pension benefits after retirement.

The return on investment of personal account pension in Chile is also declining. From 198 1 to 1990, the actual average rate of return of pension is 12.5%, from 199 1 to 9.24% in 2000, from 200/kloc-.

However, some scholars have suggested that even if the personal account is expanded, some mechanisms can be designed to improve the redistribution effect, such as imitating the "Liszt model" in Germany: subsidizing some vulnerable groups when paying fees to improve their future pension income.

There is another difficulty in adopting the nominal account scheme: how to pay interest on the savings paid by employees into personal accounts is related to the future pension income of employees.

Zheng Bingwen, a supporter of the scheme and director of the World Social Security Research Center of China Academy of Social Sciences, once told Caijing that the bookkeeping interest rate should be dynamic, that is, determined according to the economic development. Adopting the nominal account system is to link the account rate of return with the biological rate of return (the sum of the average social wage growth rate and the natural population growth rate), or directly take the biological rate of return as the account bookkeeping interest rate, so as to make the system run in a balanced way. In short, the higher the wage level, the higher the rate of return.

Now the personal account is empty, even if the nominal account system is not adopted, reasonable interest should be given. In the past, the bookkeeping interest rate was low and the regional differences were great. Taking 20 15 as an example, the interest rates of personal accounts in Shandong, Liaoning and Sichuan are 4.25%, 2.76% and 1.5% respectively.

At the end of June, the national unified employee pension personal account interest rate was first formulated and announced, which was 8.3 1%. The New Deal proposed to refer to factors such as wage growth of employees and fund balance. This adjustment is considered to make up for the low interest rate in the past and boost people's confidence in the system. Under the nominal account system, the setting process of bookkeeping interest rate will be more transparent and the actuarial degree will be higher. If the proportion of individual accounts expands, employees may have to bear more possible economic recession risks, and pension benefits may not continue the current state of administrative upward adjustment.

In addition, with the determination of the following, the transition cost is inevitable, and the pressure of payment may be dispersed to multiple generations to realize the long-term sustainability of the system.

Therefore, no matter which reform path is taken, it is difficult to call it a perfect solution, and where the individual pension account will turn needs careful consideration.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.