1. China's Basic Pension Gap
ODESSA Conference on the Challenge ageing for China’s urbanization , Paris
China's Basic Pension Gap
and The Impact on the Ways of Old-age support
He Wenjiong
Zhejiang University

2. Discussion Outline 1 . Current pension system and main problems
 2 . Basic pension gap and root-cause analysis
 3 . Basic pension and choices of old-age support

3. I Current pension system and main problems
   
1、Basic pension system
   （1）Employee’s pension insurance is designed for the wage earners. At the end of 2017, the number of participants was million, of which million were employed, million were retired, and the monthly pension per capita was 2,875 yuan.

4. （2）Urban-rural residents’ pension insurance
is for the non-working residents who are mainly peasants. At the end of 2017, the number of participants was million, of which the number of pensioners was million, and monthly pension per capita was 127 yuan.

5. Basic pension system (at the end of 2017) 402.93
The number of
Participants
(million)
monthly pension
per capita
(yuan)
Employee’s pension insurance
402.93
(including million employees, million retirees)
2,875
Urban-rural residents’ pension insurance
512.55
(including million pensioners)
127

6. 2、 Supplementary pension
    （1）Occupational annuity system: Negotiated and co-financed by employer and employee.
    ① Professional annuity for civil servants: government has unified the regulations and all the civil servants can enjoy the annuity after retirement. The number of people insured has reached million at the end of 2016 (all in service, excluding retirement)

7. ② Enterprise annuities for other wage earners except civil servants : Independent decision.
At the end of 2017, about 80,000 enterprises in the country set up enterprise annuities with more than 23 million beneficiaries . At the end of the year, the accumulated balance of funds was 1.3 trillion yuan.
   （2）personal pension: refers to commercial endowment insurance, etc. Only a few people invested. There is no specific statistics now.
   

8. 3、Main issues （1） The pension system is structurally irrational
    For the wage earners group, the basic pension accounts for a quite large proportion of the old-age income, compared with the supplementary pension which develops slowly. Only civil servants and some employees of special units have occupational annuities.   

9. （2）The gap of basic pension between
Groups is too large, and the basic pension for employees is about 20 times that of peasants ' pension.
 （3）The sustainability of the basic pension system for employees is doubtful, and it is more difficult to keep long-term balance of the payments.

10. II The basic pension gap and root-cause analysis
   
1、 Expression of the basic pension gap
   （1） Between the regions:
The basic pension gap for employees is not large, because the benefits formula is basically the same; there is a certain gap in basic pensions for urban and rural residents, but there is a unified minimum standard of 88 yuan.   

11. （2）Between occupations:
The main difference is that the pension system reform of civil servants is late, and the average pension for them is twice that for enterprises;
The difference after reform is occupational annuity which is available to all the civil servants, but not to all the enterprise workers.

12. （3）Between groups:
The basic pension for peasants is about 1/20 of the pension of wage earners.
This is the most important issue to be concerned!   

13. 2、Historical situation
    （1）The pension system for wage earners was established in the early 1950s.
The basic pension system for residents has been gradually established since 2009, and the basic pension benefits for members of society other than salaried workers have been confirmed in the last 10 years.    

14.    （2）The wage-earner system raises funds
in wages by means of compulsory ways, and is appropriately subsidized by the government; residents contribute little in the basic pension system they belong to, and all the fundamental pension comes from the public finance.   

15. 3、Reform trends
  （1） Further clarify that basic pensions are a basic national interest which has nothing to do with occupation, status, status and contribution;
Supplementary pension is not necessarily owned by everyone and can vary from person to person because of the differences in human capabilities, opportunities and social contributions.    

16. （2）Control and narrow the gap of basic pension among groups, and steadily raise the basic pension benefits standard for urban and rural residents.
   （3）In accordance with the principle of “Cover basic need ”, optimize the design of the basic pension system and gradually realize the integration of the basic pension system.    

17. III The basic pension and old-age support options
   
1、Analysis of basic pension function
   （1）Old-age security system: cover the risk of poverty, disease, disability, loneliness
include income security, health security, care security, spiritual consolation, and accessibility.
   （2）Basic pension: It guarantees old-age society members to afford basic living materials.  

18.       （3）Multi-level pension system: reasonable functional division between basic pension and supplementary pension.
   

19. 2、 The impact of the basic pension gap
on old-age support
   （1）The ability to purchase socialized services for the aged differs among groups:
civil servants, ordinary wage earners, and peasants.
   （2） Peasants : Most people cannot afford to buy socialized services. They mainly depend on home-based care, relatives care now which are apparently harder to access in the future. 

20.      （3） Ordinary wage earners: Is it reasonable to spend all their basic pension on socialized aged care services?
   （4） Civil Servants: Most of them are free to choose which socialized aged care services to purchase, but still have some limitation.   

21. 3、 Care security system and choices of
old-age support
    China is exploring the establishment of a long-term care system, which will influence the choice of old-age support for members of society.
   

22. （1）Care service subsidy system: based on an objective and fair evaluation and the degree of difficulty based on subsidies, the recipients choose the way of old-age support.
  （2） long-term care insurance system: Pilot exploration.
   （3） Provision of care services: shortage of service personnel and lack of effective mobilization mechanism.   

23. Thank you!