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The Performance of Private Pensions in the World and Inspirations for China(No.22, 2017)


By Zhu Junsheng & Zhang Chenghui, Research Institute of Finance, DRC

Research report No.22, 2017 (Total 5097) 2017-2-22

Abstract: In order to address the challenges of aging population, and enhance the sustainability and efficiency of pension system, major economies in the world have boosted the development of private pension by regulating public pension’s contribution rate and relevant preferential tax policies. Their private pension assets occupy an increasing proportion of GDP. Private pension contributes more to retirees’ income with an enlarged coverage. Annuity insurance has made an increasing contribution to insurance premium in life insurance industry. At present, China’s aggregate pension assets are inadequate. The funds needed for pension insurance are pooled from government subsidies,collective grants and personal contributions, but such a three-pillar-based pension supporting structure is imbalanced, and the basic pension insurance is facing huge pressure for sustainable development. It is necessary to develop private pension by way of increasing the aggregate pension assets, fleshing out the structural imbalance of pension system and enhancing the sustainability of basic pension insurance. China could refer to international experience, make full use of marketing mechanism in pension system, and promote private pension development through decreasing the rate of basic pension insurance and improving preferential tax policy.

Key words: private pension, pension insurance system, preferential tax policy