What is the root cause of social security deficit?

1. Reasons for the loss of social security funds: The loss of social security funds is actually caused by social phenomena, that is, the arrival of an aging society. The number of retirees has increased too much, and their life expectancy has generally increased. Due to the influence of inflation, their pension will increase every year. Therefore, when the social security fund's expenditure is too large and the new insurance can't make up the expenditure gap, it can be broadly said that the social security fund is losing money.

2. Brief introduction to the concept: The National Social Security Fund (hereinafter referred to as the Social Security Fund) refers to the social security fund managed by the National Social Security Fund Council (hereinafter referred to as the Council) and centrally managed by the central finance, which consists of funds allocated for reducing state-owned shares and equity assets, funds allocated by the central finance, funds raised by other means approved by the State Council and their investment income.

Social insurance is a social and economic system that provides income or compensation for those who lose their ability to work, are temporarily unemployed or suffer losses due to health reasons. The main items of social insurance include endowment insurance, medical insurance, unemployment insurance, industrial injury insurance and maternity insurance.

The social insurance plan is organized by the government, forcing a certain group to use part of its income as social insurance tax (fee) to form a social insurance fund. Under certain conditions, the insured can get fixed income or loss compensation from the fund. It is a redistribution system, and its goal is to ensure the reproduction of material and labor and social stability.

In China, social insurance is an important part of the social security system, occupying a core position in the whole social security system. In addition, social insurance is a contributory social security. The funds are mainly paid by employers and workers themselves, and the government finances give subsidies and bear the ultimate responsibility. However, workers can only enjoy the corresponding social insurance benefits if they fulfill their statutory payment obligations and meet the statutory conditions.