- Chinese pension fund insurance increases every year
- The “preferred policy of two children” to the universal policy of two children
- The implementation of the “one-child policy” has reduced the total number of births
- 1-if the “one-child policy” is still in effect, the pension fund savings fund will be available by 2076.
- “two-child policy” can reduce the pressure on the pension fund’s insurance fund
The problem of Chinese pension fund insurance increases every year. The government is preparing an interest rate policy to reduce the aging population and improve the solvency of the pension insurance fund. On January 1, 2016, China’s reproductive policy was amended from the “preferred policy of two children” to the universal policy of two children. This paper introduces actuarial models to analyze how reproductive policy adjustments affect the pension insurance fund.
Most developed countries became adult societies in the middle or late half of the twentieth century. The negative impact of aging on the economic and social security system is attracting the attention of foreign experts (Bakshi and Chen 1994; Anderson, 2000). To reduce the negative effects of aging, experts in some lands are putting forth the effort to promote fertility.
Chesnais (1996) suggested that low fertility rates in the developed industrial community could not maintain a meaningful human population. As the status of women continues to rise today, it is necessary to adopt policies to promote fertility rates at the rate of 2.1. Futagami and Nakajima (2002) demonstrated policy prognosis that enhances total fertility in a moral, economic, and social context. So, what is the impact of interest rates on the financial performance of a pension insurance fund?
As a UK example, Blake and Mayhew use big data to show that an increase in the total interest rate can reduce the financial burden on a pension fund. Zeng taking China as an example used a human model and found that a two-child policy is more beneficial in reducing the pension gap than a one-child policy. Overall, the literature on the impact of raising the interest rate on the financial performance of a pension fund is less than that of reasons for the low interest rate (Lee and Miller, 1990; Castles, 2003).
The implementation of the “one-child policy” has reduced the total number of births, Footnotes and the number of newborns which contributes to the increase in aging. Old age has brought a series of problems and negative consequences, such as slowing economic growth, declining statistical divisions, rising Chinese pension fund insolvency, lower note 4 and even lower payment problem.5 (Peng and Hu 2011).
To reduce these risks and negative consequences, China began developing a “one-child policy” to improve overall birth rates and reduce population aging. The “CPC Executive Committee on Dealing with the Transformation of the Total Number of Major Problems” issued on November 15, 2013 prioritized the implementation of the policy that a husband and wife from a single-parent family can have a second child, signaling the arrival of a “preferred two-child” policy.
By the end of May 2015, however, only 1.45 million couples out of 11 million couples met the above requirement to apply for a second child. Social Development (following the so-called recommendations of the 13-year plan) prioritises the policy of the couple can have a second child (international policy for two children). The National People’s Congress passed an amendment to the Census and Family Planning Act on December 27, 2015, and the international policy of two children was officially implemented on January 1, 2016.
Therefore, will the international policy of two children reduce the pressure on the pension fund fund. pensions, even payment problems for a pension fund fund? Footnote 7 This paper uses an actuarial model to analyze the impact of interest policy adjustments on the financial performance of a pension fund.
- 1-if the “one-child policy” is still in effect, the pension fund savings fund will be available by 2076.
- 2-if all couples who comply with the “two-choice policy” give birth to a second child, the period for the shortfall of the pension insurance fund shall be deferred to at least 9 years.
- 3-Following the commencement of a universal policy for two children, the accumulated period of deficit in the pension insurance fund may be delayed under various maternity leave purposes, if more than 54% of eligible couples have a second child, the accumulated shortage of pension insurance. The fund would not have appeared before 2090. The above conclusions passed sensitivity tests.
Conclusion
Therefore, a “two-child policy” can reduce the pressure on the pension fund’s insurance fund. If the government wants to solve the problem of paying a pension insurance fund, interest rates should be improved.
by/Amina Iqbal senior editor and writer