What Are the Different Ways to Save for Retirement?

The retirement security system is a major subsystem of the social security system and an important condition for ensuring the normal operation of the labor market.

Retirement protection system

Right!

The retirement security system is a major subsystem of the social security system and an important condition for ensuring the normal operation of the labor market.

Chinese name

Retirement protection system

Solid

A major subsystem of the social security system

importance

Ensure the normal operation of the labor market

Fundamental contents

Principles for retirement protection

The basic contents of the retirement protection system are: the principles that retirement protection should follow. Funding methods and sources of bonuses, forms of retirement security, conditions and standards of enjoyment, and management system. ^[1]

At present, China's retirement protection system has the following disadvantages: ^[2]

To establish a mature retirement protection system with Chinese characteristics, we must take China's reality as a starting point, learn from and absorb foreign experiences and lessons, and carry out functional reforms of the current retirement protection system. The focus of the reform includes: ^[2]

(1) Universalization of income security for retirees. The new retirement protection system should be able to: adapt to multiple economic forms. The long-term coexistence of multiple business methods and the need for workers to move between different ownerships and different enterprises. All workers will be supported after retirement, and workers in various economic components can receive income security when they are old.

(2) Multi-layered retirement protection system. Establish an old-age security system combining statutory old-age security with corporate supplementary old-age security and personal savings old-age security, with three pillars to ensure the life of the elderly. The statutory guarantee must be universal. All workers in cities and towns should participate, pass legislation, and enforce it. Participants should enjoy their rights on equal terms and conditions. The statutory old-age security benefits must be compatible with the current level of productivity and mainly guarantee their basic living income. Supplementary old-age security and personal pension savings are the second source of income for workers after retirement. To reflect the principles of autonomy and efficiency, a well-managed enterprise can establish supplementary pension insurance for employees, but it must be in its own funds. Settlement can not be pre-tax expenditure or push costs.

(3) Multi-channel financing of pension insurance. The state, the collective, and the individual are reasonably burdened, and the spirit of individual responsibility is appropriately emphasized to enhance the "self-protection" awareness and sense of responsibility of employees.

(4) Change the "pay-as-you-go system" to a "partial accumulation system" and establish a pension reserve fund. Some experts from the World Bank pointed out in a 1984 development report that the heaviest burden on Chinese pensioners will be when the large number of people born at the peak of childbearing in the late 1960s and early 1970s enter the retirement period. The number of elderly people is twice that of developed countries in 1980. At present, it is difficult for developed countries to maintain the old-age security system. The pensions of these people should be raised before they retire. Reserve the necessary pension funds for the peak of aging, which can reduce the pressure in the future, so we must change the pay-as-you-go system to a partial accumulation system.

(5) Rationalization of insurance benefits. It is necessary to maintain a basic life and make a difference, and ensure that the actual income of retired employees does not fall due to rising prices, so that retired employees can share the fruits of social development.

(6) Legalization and institutionalization of retiree income security. In order to establish a new income security system for retirees, it is necessary to formulate relevant laws, stipulate methods for raising and managing pensions, and formulate corresponding measures for their use. At the same time, corresponding labor security institutions should be established to specifically manage and use retirement funds.