国际劳工组织（ILO）：中国多层次养老保险体系 ILO review of the multi-tier pension system in China - Technical note

ILOreviewofthemulti-tierpensionsysteminChina

Technicalnote

December2022

2ILOreviewofthemulti-tierpensionsysteminChina

Contents

ACKNOWLEDGEMENTS3

1INTRODUCTION4

2THEROLEANDSHAPEOFCHINA’SMULTI-TIERPENSIONSYSTEM5

2.1THEROLEOFMULTI-TIERPENSIONSYSTEMS5

2.2KEYFEATURESOFCHINA’SMULTI-TIERPENSIONSYSTEM8

3DEMOGRAPHICANDSOCIO-ECONOMICOUTLOOK14

3.1DEMOGRAPHICS14

3.2ECONOMICCONTEXT14

3.3LABOURMARKET14

3.4INCOMESANDWEALTH15

3.5FISCALCONTEXT16

4CHINA’SMULTI-PILLARPENSIONSYSTEMINTHECONTEXTOFINTERNATIONAL

LABOURSTANDARDS18

4.1UNIVERSALITY(PRINCIPLE1)18

4.2ADEQUACYANDPREDICTABILITYOFBENEFITS(PRINCIPLE3)21

4.3NON-DISCRIMINATION,GENDEREQUALITYANDRESPONSIVENESSTOSPECIALNEEDS(PRINCIPLE5)25

4.4SOCIALSOLIDARITYANDCOLLECTIVEFINANCING(PRINCIPLES2AND4)26

4.5OVERALLANDPRIMARYRESPONSIBILITYOFTHESTATE(PRINCIPLE4)27

4.6FINANCIAL,FISCALANDECONOMICSUSTAINABILITY(PRINCIPLE6)27

4.7TRANSPARENTANDSOUNDFINANCIALMANAGEMENTANDADMINISTRATION(PRINCIPLE7)28

4.8INVOLVEMENTOFSOCIALPARTNERSANDCONSULTATIONSWITHOTHERSTAKEHOLDERS(PRINCIPLE8)29

4.9COHERENCEANDADAPTABILITYOFTHEPENSIONSYSTEM29

5CONCLUSIONANDRECOMMENDATIONS31

5.1OVERARCHINGCONSIDERATIONS31

5.2SPECIFICCONSIDERATIONSFORTIER132

5.3SPECIFICCONSIDERATIONSFORTIER2AND332

5.4AREASFORFUTURERESEARCH/DIALOGUE33

REFERENCES34

3ILOreviewofthemulti-tierpensionsysteminChina

Acknowledgements

Thistechnicalnoteisproducedunder

theEU-ChinaProject“ImprovingChina’sInstitutional

CapacitytowardsUniversalSocialProtection”(2019-2022)

.TheprojectisfundedbytheEuropeanUnionandisjointlyimplementedbytheILOandtheMinistryofHumanResourcesandSocialSecurity(MOHRSS)ofthePeople’sRepublicofChina(PRC).

TheworkisledbyLuisFrota,ILOProjectManagerandNunoCunha,SeniorSocialProtectionSpecialist,ILODecentWorkTeamBangkok.ThenoteisauthoredbyCharlesKnox-Vydmanov,internationalconsultantandLuisFrotawithtechnicalcontributionsbyNunoCunha,AndrePicard,ILOSeniorActuaryandMichelStGermain,internationalconsultant.

Theworkhasbenefitedfromvarioustechnicaldiscussionsin2022,includinganonlineseminarinMay2022takingstockofrecentpensionreformsinternationallyandinChina,participatedbyMOHRSS,ILO,nationalandinternationalexperts,aface-to-facemeetinginJuly2022withPensionDepartmentofMOHRSS,andafinalvalidationworkshopwithMOHRSSinDecember2022.MOHRSSPensionDepartment(ledbyLiDehong,DeputyDirector-General),DepartmentofRuralSocialInsurance(ledbyWangZeying,DeputyDirector-General),SocialInsuranceAdministration(ledbyZhaiYanli,Director-General),InternationalCooperationDepartment(ledbyRenXiuli,Director,TechnicalCooperationDivision),andChineseAcademyofLabourandSocialSecurity(CALSS,ledbyFeiPing,AssociateResearcher)activelymadeinputsinthediscussions.TheauthorsalsohadindividualdiscussionswithZhengGongcheng,PresidentoftheChinaAssociationofSocialSecurity,ZhangWentao,Director,Employers'DepartmentofChinaEnterpriseConfederation,andCarmeloMesa-Lago,PittsburghUniversity.AsituationanalysisofChina’smulti-tierpensionsystemdevelopedbyXieYuzhao,FeiPingandYang,researchersfromCALSSprovidedbackgroundinformationforthetechnicalnote.

TheauthorssincerelythankMOHRSSfortheircollaborationandtremendoussupportthroughoutthisprocess.

4ILOreviewofthemulti-tierpensionsysteminChina

1Introduction

ThistechnicalnoteprovidesareviewofChina’smulti-tierpensionsysteminthecontextofILOInternationalLabourStandardsonSocialSecurity.Thisreviewisintendedtoprovideacontributiontoongoingpensionpolicydevelopment.Ratherthanprovidingdetailedrecommendationsfordistincttiersandschemeswithinthem,thenotefocusesonthequestionofhowthesystemaswholecansupportachievementofmultiplepensionobjectives.

ThedesignofthepensionsystemhasimportantimplicationsforChina’sobjectiveofcommonprosperity.Rapidpopulationageingandchangesinfamilystructuresmeanthatformaloldagesocialprotectionmechanismsarebecomingincreasinglyimportant.Anygapsincoverageandadequacyofthepensionsystemriskreversingthegainsinthereductionofpovertyandleadingtogreaterincomeinsecuritywhichcouldundermineimpressiveimprovementsinlivingstandardsinpreviousdecades.Thelevelofincomesecurityprovidedtoindividualsandfamiliesbythepensionsystemalsohassignificantimplicationsforthewidereconomy,includingintermsoflevelsofprecautionarysaving.

Multi-tierpensionsystemsplayanimportantroleinachievingcoverageandadequacyofthepensionsysteminafinanciallysustainableway.Amulti-tierapproachrecognisesthatnosingleinstrumentcanachieveallobjectivesofthepensionsystem,notleastgiventhatthesituationofindividualsacrossthepopulationvariessignificantly(includingintermsofincomelevelandemploymentcircumstances).Chinahasbeenapioneerinpursuingamulti-tierpensionsystem,butensuringitscontinuedevolutionrequirescontinuedattention.Internationalexperienceshowsthatfragmentedapproachestoachievingoverlappingobjectivesinpensionpolicycanleadtoconflictingpaths,poorincentivesandinefficiencies.Aneffectivemulti-tiersystemisthusnotonlyonewherecomponentschemesarewelldesigned,buttheyworkinacomplementaryandmutuallyreinforcingfashionwitheachother,withwell-definedrolesandresponsibilities.Thereisnoone-size-fits-allapproachtobuildingamulti-tiersystem,andcountriesacrosstheworldhavesuccessfullyemployedarangeofapproaches.

Chinaisatanimportantmomentinthedevelopmentofitsmulti-tierpensionsystem.CoverageofChina’spensionsystemhasexpandedrapidlyinrecentyears,andhasachievedfulllegalcoverageofTier1basicinsuranceschemesforemployeesandresidents.By2020,morethanabillionpeoplewereparticipatinginbasicpensioninsurance,withthevastmajorityofolderpersons(age60andover)receivingpensionbenefits,andmostworkersmakingpensioncontributions.Inaddition,thereweremarkedeffortstobringgreatercoordinationandconsistencytoschemes,includingthroughtheunificationofruralandurbanresidents’schemes,andprogresstowardsnationalpoolingofbasicinsuranceforurbanemployees.Meanwhile,growingattentionisbeingputonthecontributionofTier2(occupationalpensions)andTier3(privatecommercialpensions).EffortshavebeenputintoimprovingtheregulatoryframeworkforTier2pensions(asindicatedinthe13thand14thNational5-yearPlans)whileinitiativestoexpandTier3pensionshaveinvolvedpilotinitiativesandplanstopromotetheimplementationofthisTieratanationallevel.AquestionforpensionpolicyinChinaishowexpandingTier2and3elementsshouldinteractwiththecontinuedrefinementofTier1pensions.

Thenoteisstructuredasfollows:Thepaperbeginsbysummarisingthemainrationaleforamulti-tierapproach,anddescribingtheshapeofChina’ssystem.Followingareviewofkeyelementsofthesocio-economiccontextrelevantforpensionpolicy,thenotereviewstheperformanceofthemulti-tiersysteminrelationtokeyprinciplesidentifiedinILOsocialsecuritystandards.

5ILOreviewofthemulti-tierpensionsysteminChina

2TheroleandshapeofChina’smulti-tierpensionsystem

2.1Theroleofmulti-tierpensionsystems

Chinawasapioneerinadvancingamulti-tierpensionsystem.Theconceptofmulti-tierpensionsystems(whichonlyemergedgloballyinthe1980sand1990s)hasbeenembeddedinChinesepensionpolicysincethemid-1990s,andisclearlyencapsulatedunderArticle3oftheSocialInsuranceLaw(StandingCommitteeofNationalPeople’sCongress2010).Thisstandsincontrasttomanycountriesacrosstheglobewherepensionpolicydevelopmentisrelativelyfragmented,withalackofasystemicvision.

Theprimaryrationaleforamulti-tierapproachisthatachievingdifferentpensionobjectivesrequiresacombinationofinstruments.Thesecoreobjectivesarecommonlydescribedasbeing:incomesmoothing,insurance,povertyreliefandredistribution

(Box2-1

).AlloftheseobjectivesfeaturestronglyinChina’spensionpolicydevelopment.Article1ofChina’sSocialInsuranceLawstatesclearlyaredistributivefunctionofsocialinsurance“enablingcitizenstosharetheachievementsofdevelopmentandpromotingsocialharmonyandstability”,andemphasisingitsimportanceforsocialcohesion.Pensionsarealsounderstoodtoplayanimportantroleinreducingpoverty.Incomesmoothingandinsuranceareembeddedcentrallywithintheparametersofsocialinsuranceschemes,withthemixofsocialpoolingandindividualaccountsthat–combined–provideaformofinsuranceaswellasearnings-relatedbenefits.

Box2-1:Keypensionobjectives

•Povertyrelief:pensionsprovideanimportantmechanismtoreducepovertyofolderpeopleandtheirfamilies.

•Incomesmoothingpensionsystemsprovideamechanismbywhichindividualsreducetheirincometoday(throughcontributions)inorderthattheyhavehigherincomesinolderage(throughpensionpayments).Incomesmoothingimpliestheprovisionofearnings-relatedbenefits,usuallymeasuredbytheirreplacementraterelativetopreviousearnings.

•Insurance:pensionsystemsprovideamechanismtosharerisksbetweenindividuals.Theseincludetheriskofoutlivingone’ssavings(longevityrisk)andeconomicriskssuchasretiringatthemomentofaneconomicdownturn.

•Redistribution:Pensionsystemscanredistributebetweendifferentpartsofthepopulation,suchasbetweengenerations,betweenhigherandlowerearners,betweenmenandwomen,andbetweendifferentgeographicalregions.

Source:BarrandDiamond(2009)

Thekeyquestionformulti-tierpensionsystemsiswhatcombinationoftiersbestachievestheseobjectives.Akeychallengeinthiscontextisthesignificantdiversityinthesituationofindividualsinteractingwiththepensionsystem.Thisincludesaspectruminlevelsofincome,andawidevarietyofemploymentcircumstances(includingthosewhomayspendlargeportionsoftheirlifeoutsidethelabourforce).Theimportanceofdifferentpensionobjectiveswillvaryforpeopleindifferentcircumstances:forexample,whilepovertyreliefmaybeacoreconcernforalow-incomeagriculturalworker,incomesmoothing,andinsurancemaybeofmuchgreaterrelevanceforthosewithrelativelyhighearnings.Addingfurthercomplexityisthatpeople’s

6ILOreviewofthemulti-tierpensionsysteminChina

situationchangesovertime.Acentralchallengeisorganisingasetoftiersthatarecoherentsothatpeoplecanbuildanoptimallevelofpensionadequacyinafinanciallysustainableway.Thisalsoinvolvesdefiningthelevelofriskstakenonbydifferentactorsinachievingtheseobjectives.

Box

2-2providesadefinitionofwhatcanbeconsideredabenchmarkforaneffectivemulti-tiersystem,butalsohighlightsthechallengesinvolved.

Box2-2:Definitionofaneffectivemulti-tiersystem

Effectivemulti-tierpensionsystemssupporttheachievementoftherangeofsystemobjectivesfordifferentpeople(whosesituationmaychangeovertime)inawaythatiscoherentanddistributesrisksbetweenindividuals,enterprisesandgovernmentinanappropriateway.

Thereisnoone-size-fits-allforamulti-tierpensionsystem.Thisisduetovariousfactors,including:theweightputondifferentobjectiveswillvarybasedonthelegacyofnationalsystemsandpathdependencies,nationalpreferencesandgovernmentpolicypriorities;thesituationofindividualsandenterpriseswithinthepopulationwillvaryfromcountrytocountry,anddifferentcountrieswillmakedifferentassessmentsonhowrisksshouldbesharedbetweenindividuals,enterprisesandthegovernment.Thisexplainswhyapproachesfromonecountrycannoteasilybetransposedtoothers,norcomparedsimplistically,andwhycountrieswilloftenchoose“second-best”policysolutions(BarrandDiamond2009).Thatis,approachesthatseemoptimalintheorymaynotbeimplementableinagivencontext.

Ausefulframeworkforassessingtheperformanceofmulti-tierpensionsystemsareprinciplesforpensionpolicyestablishedbyILOInternationalLabourStandardsonSocialSecurity(

Box2-3

).Theseprinciplesaligncloselywithmanyoftheobjectivesdescribedabove,however,theyprovideamoreconcretesetofstandardsagainstwhichpensionsystemscanbeassessed.Thesestandardshavebeencodifiedbasedoninternationaldialogue,andChinesesocialpartnershavebeenactivelyinvolvedininternationaldiscussionontheirimplicationsforpensionpolicy.1Theprinciplesin

Box2-3

areusedasareferencepointtodiscusstheChinese

multi-pillarsysteminSection

4.

Box2-3:ILOprinciplesfordesigningandreformingpensionsystems

Principle1.Universality:Progressivelyreachinguniversalcoveragewithrespecttopensionsmeansguaranteeingthehumanrighttoincomesecurityinoldageforall,withnooneleftbehind.

Principle2.Socialsolidarityandcollectivefinancing:Thecollectivefinancingofsocialsecuritysupportsredistributionandsharingoffinancialandlabourmarketrisksbetweenindividuals(insurance).Socialsolidarityandsolidarityinfinancingimplyafairdistributionofcontributionsbetweenemployersandworkers,aswellassolidaritybetweeneconomicallyactiveandnon-activemembersofsociety,betweenmenandwomen,betweenthosewithhighwages/earningsandthosewithlowwages/earningsornoearningsandbetweenpresentandfuturegenerations.Oldagepensionsarethustheresultofsocialsolidaritybutatthesame

1Forexample,in2020theMOHRSSandsocialpartnerscontributedtoaninternationalTripartiteRoundTableonPensionTrendsandReforms(ILO2021).

7ILOreviewofthemulti-tierpensionsysteminChina

timeawaytoboostsocialcohesionthroughredistributiontowardsthevulnerablemembersofsociety.

Principle3.Adequacyandpredictabilityofbenefits:Adequacyisusuallydefinedinoneoftwoways:inrelationtopreviousearnings(morecloselyrelatedtotheobjectiveofincomesmoothing)orintermsofaflat-rateminimum(morecloselyrelatedtotheobjectiveofpovertyalleviation.ILOstandardsforeseethatattheveryleast,eachcountryshouldhaveasocialprotectionfloorthatguaranteesatleastbasicincomesecurityinoldage,accordingtoanationalthresholddeterminedbyreferencetothemonetaryvalueofasetofgoodsandservicesthatareconsiderednecessarytosecurelifeindignity.Forthoseabletoaffiliatewithexistingsocialinsurancemechanisms,pensionsprovidedshouldrepresentapercentageoftheirreferenceearningsadequatetoallowthemtomaintaintheirstandardoflivinginoldage.Predictabilityrelatestobenefitsbeingguaranteedforfutureretirees,butalsothattheyareadjustedtochangesinthecostoflivingand/orthegenerallevelofearningsonceanindividualretiressoastomaintainpensions’purchasingpowerandtheiradequacy.

Principle4:Overallandprimaryresponsibilityofthestate:ILOstandardsstipulatethatthestateistheoverallguarantorofthesolvency,viabilityandeconomicsustainabilityofthepensionsystem,withdueregardtosocialjusticeandequity.Thespecificroleofthestatemayvaryfordifferentelementsortiersofthepensionsystem.Inaddition,governmentsareresponsiblefordesigningandimplementingpoliciestoachievecohesionbetweenthevariouscomponentsofthesocialprotectionsystematboththenormativeandoperationallevels,aswellasitscoherencewithothereconomicandsocialpolicies.

Principle5:Non-discrimination,genderequalityandresponsivenesstospecialneeds:ILOstandardsstipulatethatpensionsystemsshouldbedesignedtooffsetgenderinequalitiesoriginatinginthelabourmarket(redistribution).Meanwhile,theyshouldnotdiscriminateonthebasisofdimensionssuchasage,raceanddisabilitystatus,whilepayingattentiontothespecialneedsofgroupsfacingparticularbarrierstoaccessingpensionsystems.

Principle6:Financial,fiscalandeconomicsustainability:Sustainabilityreferstothecurrentandfuturecapacityoftheeconomytobearthecostsofsocialsecurity.Assessingsustainabilityrequiresthevaluationschemespecificfinancing(suchasviaactuarialvaluation)aswellasanassessmentofthewidereconomic,fiscalanddemographicoutlook.However,sustainabilityalsohassocialandpoliticaldimensions,notleastinhowreducedcostsforpublicpensionsincreaseothercostsforhouseholdsandwiderfamilies.

Principle7:Transparentandsoundfinancialmanagementandadministration:Thisreferstotheneedforgoodgovernanceofthesystem,particularlywithrespecttofinancing,managementandadministration.Akeytaskformanagementandadministrationistosupportcoherentinteractionofschemesandpillars.Communicationisalsokeytoensuringstakeholderhavetherightinformationtoparticipate.

Principle8.Involvementofsocialpartnersandconsultationswithotherstakeholders:

ILOstandardsunderscoretheimportanceofsocialdialogueandrepresentationofprotectedpersonsinsocialsecuritygovernance.Thisiscriticaltoensurepensionsystemsareadaptedtotherealitiesofparticipatingstakeholders,andalsothatreformsgainthenecessarysocialand

politicalbuyin.

Source:ILO(2018).

8ILOreviewofthemulti-tierpensionsysteminChina

OtherconsiderationsthathaveemergedstronglyinChineseandinternationalpension

policy

•

discussionsinclude:

Coherence:Itisimportantthatdifferentschemesandtierswithinthepensionsystemareorganisedcoherentlysotheycanbeeasilynavigatedbyactorsinthefieldofpensions

(includingworkers,employers,pensioners,andthestate).Ariskofincoherentsystemsisthattheymaycreateperverseincentivesthatunderminepensioncoverage,adequacyandfinancialsustainability(seeSection

4.9

).

•Flexibility/adaptability:Apensionsystemneedstodeliveradequatelyforallworkersinadiverserangeofcircumstances,rangingfromthosewithlittletonocapacitytocontribute,tothosewithhighcontributorycapacity.Italsoneedstoadapttodifferentemploymentrelationships.Moreover,apensionsystemshouldideallyberesponsivetohowpeople’scircumstanceschangeovertime,allowingthemtocontinuebuildingpensionentitlements.

•Supportingeconomicdevelopment:Thisincludesvariousaspectsincludingboostingconsumptionledgrowthbyreducingprecautionarysavings(bymakingsavingmoreproductive)and,thoughnotitsprimaryfunction,theroleofpensionfunds(publicandprivate)hasbeenincreasinglyrecognizedassupportinglongtermproductiveinvestmentforinclusive,sociallyjustandgreeneconomictransitions(ISSA2020).

2.2KeyfeaturesofChina’smulti-tierpensionsystem

China’spensionsystemisusuallydescribedasconsistingofthreetiers.Thesethreetiers(andtheirsub-programmes)aresummarisedin

Table1

(excludingschemesspecificallyforpublicsectorworkers).Tier1consistsoftwoschemes:theBasicinsuranceforurbanandruralresidents(RURPS)andtheBasicinsuranceforurbanemployees(UEPS).TheUEPSisamandatorysocialinsuranceschemeforurbanemployees,withurbanself-employedhavingthepossibilitytocontributevoluntarily.TheRURPSisavoluntaryschemeforallthosenotcoveredbytheUEPS.BoththeUEPSandRURPSincludeasocialpoolingcomponentaswellasanindividualaccount.Tier2ofthepensionsystemconsistsoftheEnterpriseannuity,wherebyenterprisescanvoluntarilyestablishoccupationalschemesfortheiremployees,followingadefinedcontributionmodel.Tier3consistsofindividualpensionsviaprivatecommercialinsurance,alsofollowingadefinedcontributionmodel.Tier3wasestablishedatthenationallevelin2022andiscurrentlybeingpiloted.

9ILOreviewofthemulti-tierpensionsysteminChina

Table1:ThemaincomponentsofChina’smulti-tierpensionsystemforprivatesector

Tier1

Tier2

Tier3

Basicinsuranceforurbanandrural

residents(RURPS)

Basicinsuranceforurbanemployees

(UEPS)

Enterpriseannuity

Individualpensions

Socialpooling

Individualaccount

Socialpooling

Individualaccount

(Pilotsinselectedcities)

Mandatory/voluntary

Voluntary

Mandatory(employees)andvoluntary(self-employed)

Voluntary

Voluntary

Legalcoverage

Urbanandruralresidents(notemployees)

Urbanemployeesandself-employed

Employees

ParticipantsinRURPSandUEPS

Contributions

None

Steppedcontributionbetween100and

2,000yuanperyear

2

Employer:16%

Employee:8%

Definedatcompanylevel.Maximumof8%foremployersandatotal12%ofemployee’ssalary.

Minimumandmaximumcontributionbase(60%and300%oflocalaveragewage)

Normalpensionage

60

60

Men:60-Women:50,55or60dependingonprofession.

Earlyretirementpossibleforthoseengagedinphysicalwork.

Benefits

Basicflatbenefitpaidafter15yearsofcontribution.

Savingsinindividualaccounts÷1393

Definedbenefitformula–linkedtoindividualand

Definedcontribution

Definedcontribution

Lumpsumorphasedwithdrawal

Definedcontribution

2Thisisthelevelstipulatedbycentralgovernment,butthismayvaryatcountryandmunicipallevel(T.ChenandTurner2015)

3Equivalenttothenumberofmonthsforretirementattheageof60ofthebasicpensionsforemployees.

10ILOreviewofthemulti-tierpensionsysteminChina

Minimumbenefi