The New Fertility Policy and the Actuarial Balance of China Urban Employee Basic Endowment Insurance Fund Based on Stochastic Mortality Model

Xie, Yuantao; Zhang, Xinzhu; Lv, Houchen; Guo, Xiaojing

doi:10.1155/2020/3596384

Cited by 9 publications

(16 citation statements)

References 26 publications

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“…The results showed that all the key assumptions passed the robustness test. As mentioned in the literature review, few scholars in China have conducted indepth research on the relationship between fertility policy adjustments and UEBMI fund sustainability [22][23][24].…”

Section: Discussionmentioning

confidence: 99%

“…In addition, compared with URRBMI, the sustainability concerns regarding the UEBMI fund have attracted more attention from scholars, and the forecast horizon of much of this research is 2050. These studies concluded that the adjustment of the fertility policy could delay the occurrence of the deficit of the UEBMI fund and reduce the deficit amount to a certain extent; this has been generally recognized by scholars [20][21][22][23][24].…”

Section: Introductionmentioning

confidence: 99%

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The effect of the universal two-child policy on medical insurance funds with a rapidly ageing population: evidence from China’s urban and rural residents’ medical insurance

2021

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Background With the rapid growth of the ageing population, the operating burden of China’s basic medical insurance fund is becoming increasingly heavy. To counter rapid population ageing and ameliorate a series of problems, China has adjusted its fertility policies several times. On January 1, 2016, the universal two-child policy was implemented. This study analysed the impacts of the adjustment to the fertility policy and potential improvements in fertility intention on the insured population and medical insurance fund sustainability. Methods We used an actuarial science method and took the urban and rural residents’ basic medical insurance (URRBMI) of China, which covers most urban and rural residents, as an example to build a dynamic forecast model of population growth and a dynamic actuarial model of medical insurance funds. Results Compared with the original policy, under the current fertility intention (40%) with the universal two-child policy, the ageing of the population structure of URRBMI participants will decline significantly after 2026, and individuals aged 65 and over will account for only 19.01% of the total participants in 2050. The occurrence of the current deficit and accumulated deficit of the URRBMI fund will be postponed for one year to 2022 and 2028, respectively. If fertility intentions continue to rise, the ageing degree of the population structure will decrease, and the deficit would be further delayed. Conclusions The universal two-child policy is conducive to improving the degree of overall population ageing, delaying the occurrence of a URRBMI fund deficit, and improving the sustainability of URRBMI funds. If fertility intention increases, the effects would be stronger. However, since the adjustment of the universal two-child policy has a certain time lag, it will take time to demonstrate this impact. Therefore, while actively promoting the universal two-child policy, other measures should be taken, such as improving the fertility desire among couples of childbearing age and reforming medical insurance payment methods.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

The effect of the universal two-child policy on medical insurance funds with a rapidly ageing population: evidence from China’s urban and rural residents’ medical insurance

2021

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“…ough these reforms could enhance the financial sustainability, it is unlikely to completely settle the problem of inadequate solvency of pension funds (Xie et al [3]; Zeng and Yu [4]). Meanwhile, the Chinese government also considers extending the mandatory retirement age and implementing the collection system reform.…”

Section: Introductionmentioning

confidence: 99%

“…Although China's UEBPI system does not stipulate the government's contribution responsibility, the government still provides fiscal subsidies to the provinces with an annual deficit in funds. Zheng [3] suggested that fiscal subsidy should be fixed at a certain level, so that the pension system could achieve a balanced development by itself. According to "Statistical Bulletin on the Development of Human Resources and Social Security," the fiscal subsidy accounted for 18%-21% of the UEBPI fund's expenditure from 2015 to 2019, with an average value of 20.17%.…”

Section: Optimization Scenario 3: Introducing External Financementioning

confidence: 99%

Financial Imbalance Risk and Its Control Strategy of China’s Pension Insurance Contribution Rate Reduction

Jing

Cai

Zhu

et al. 2021

Mathematical Problems in Engineering

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Within the context of China’s Urban Employees’ Basic Pension Insurance (UEBPI), this paper constructs an actuarial model to analyze the financial imbalance risk of contribution rate reduction and to investigate the possibility of further reducing the contribution rate. It is found that the UEBPI fund would show financial imbalance risk in 2024 if the contribution rate is 16%, and no control strategy is introduced. In the case of single strategy (the collection system reform, delay of retirement age, or the introduction of external finance), the financial sustainability of the UEBPI fund could be improved to some extent, whereas the financial imbalance risk remains huge. In the case of a package of control strategies being implemented, the UEBPI fund could be able to continue its operation until 2060, and the contribution rate can be further reduced by 0–4 percentage. Therefore, the implementation of a package of control strategies presents a prerequisite for controlling the financial imbalance risk and further reducing the contribution rate.

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“…Some studies have considered the impact of longevity risk. Xie et al [25] aimed to investigate the impact of China's new fertility policy on the actuarial balance of its CEBPS fund, with a stochastic mortality model included to address longevity risk. Zhao et al [26] built a comprehensive risk assessment system to evaluate the solvency sustainability of CEBPS by integrating the Lee-Carter model into their population projection.…”

Section: Introductionmentioning

confidence: 99%

A Study on Fiscal Risk of China’s Employees Basic Pension System under Longevity Risk

Xiao

Pamučar

et al. 2021

Sustainability

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It is generally accepted that China’s Employees Basic Pension System (CEBPS) cannot cover its expenses. The government needs to fill the gap in income and expenditure with fiscal revenue to ensure sustainability of the system, which may cause it to take fiscal risk caused by the volatility of the fund gap. In this article, through the establishment of a prediction model for the income and expenditure of CEBPS with dynamic mortality, we aimed to measure the fiscal risk caused by longevity risk and provide policy basis for the government. We found that longevity risk leads to serious fiscal risk. The income and expenditure gap of CEBPS fluctuates greatly, and the 2.5% and 97.5% quantiles of fund balance in 2067 are 1.52 and 0.44 times the expected value, respectively. The knock-on effect of fiscal risk, measured by value-at-risk (VaR), is 1.15 times gross domestic product and 4.75 times state fiscal expenditure in 2020. In this article, we not only calculate the expected value like the other literatures but also discuss the volatility of the CEBPS fund gap.

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The New Fertility Policy and the Actuarial Balance of China Urban Employee Basic Endowment Insurance Fund Based on Stochastic Mortality Model

Cited by 9 publications

References 26 publications

The effect of the universal two-child policy on medical insurance funds with a rapidly ageing population: evidence from China’s urban and rural residents’ medical insurance

The effect of the universal two-child policy on medical insurance funds with a rapidly ageing population: evidence from China’s urban and rural residents’ medical insurance

Financial Imbalance Risk and Its Control Strategy of China’s Pension Insurance Contribution Rate Reduction

A Study on Fiscal Risk of China’s Employees Basic Pension System under Longevity Risk

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