Multiple pillars support high-quality elderly care.
The report of the 20th National Congress of the Communist Party of China points out that the social security system serves as a safety net for people’s livelihoods and a stabilizer for social operations. We must improve the nationwide unified basic pension insurance system and develop a multi-pillar pension insurance system. To this end, we need to promptly address existing shortcomings, consolidate the foundation for the sustainable development of pension insurance, and provide stronger and more reliable institutional safeguards to ensure that the vast majority of people can enjoy a secure and well-cared-for old age.
Since the 18th National Congress of the Communist Party of China, China has achieved significant progress in building its pension insurance system. In terms of basic old-age insurance, over the past decade, the number of participants in China’s basic old-age insurance scheme has increased from 788 million to 1.03 billion, making it the pension insurance system with the largest coverage worldwide. At the same time, pension benefits have also improved markedly. In terms of institutional development, a unified basic old-age insurance system for urban and rural residents has been established; provincial-level pooling of pension insurance funds has been fully implemented; and a central adjustment system for the basic old-age insurance fund has been set up. Complemented by enterprise annuities, a three-pillar pension insurance system—including basic old-age insurance, commercial pension insurance, and individual pension insurance—has been preliminarily established.
Looking at future development trends, China’s aging population continues to deepen. By the end of the 14th Five-Year Plan period, China will have fully entered a moderately aged society, and the number of cities entering a deeply aged society is steadily increasing. This places considerable pressure on the pension insurance system. Currently, compared with the basic pension insurance system, both the enterprise annuity and occupational annuity systems—serving as the second pillar—and the commercial pension insurance and individual savings-based pension insurance systems—constituting the third pillar—are developing much more slowly, becoming clear weak links in the overall pension insurance system. Regarding the second pillar, although China’s enterprise annuity system was established relatively early, its progress has been relatively slow. As for commercial pension insurance, although it has seen relatively rapid growth in recent years, overall participation rates remain low. Meanwhile, the recently launched individual savings-based pension insurance still needs to enhance public acceptance and popularization.
To further improve China’s pension insurance system, we must adopt a multifaceted approach. While continuously strengthening the basic pension insurance system’s protective functions, we should also vigorously develop corporate annuity schemes, commercial pension insurance systems, and individual savings-based pension insurance systems.
On the one hand, we should encourage more qualified enterprises to establish corporate annuity schemes and actively innovate corporate annuity plans tailored to small and medium-sized enterprises. This is an important way to boost participation rates in corporate annuities and expand their coverage. On the other hand, we should accelerate the development of commercial pension insurance and encourage commercial insurance institutions to provide personalized and differentiated retirement protection services for individuals and families. We must continuously refine supporting measures and vigorously promote the development of individual pension schemes that are backed by government policies, voluntarily joined by individuals, and operated through market mechanisms. We should also step up fiscal and financial support to motivate and encourage individuals to actively participate in commercial pension insurance and individually funded pension savings programs. Only in this way can China’s multi-pillar pension insurance system be established swiftly, and the foundation for the sustainable and stable development of the pension insurance system will become even stronger.
