The Debt Actuarial Model and Its Application of China's Implicit Pension

Abstract

With the development of the times,the improvement of living standards and the extended average expected life, the pension insurance systems of countries have suffered from varying degrees of crisis,and reform actively.In this era background and trend,in 1997,China's basic pension system was accumulated by the current payment to social coordination and individual accounts.The revolutionary cost left in the old system has formed a huge implicit debt.To achieve the realization of the system transition, the key is to properly measure the size of the implicit debt and find the appropriate repayment pathway. Whether the pension system transformation is successfully correlated with the accurate calculated IPD amount and reasonable solutions.China is no exception to face IPD issues.This paper uses personal cost statement,combined with China's pension system and its operation,and establishs a implicit pension debt calculation model,and then uses statistics to measure China's IPD quantity.Finally,this paper proposes that the government increases the legal retirement age,reducing the replacement rate of pension, expanding the coverage of pension insurance,and improving the investment yield of pension funds to compensate for China's IPD.