The notional and the real in China’s pension reforms

Author(s)
Lu, Bei
Piggott, John
Zheng, Bingwen
Date Issued
August 4, 2019
Subjects
Pensione
Previdenza
Abstract
This paper discusses the potential expansion of the role of the notional defined contribution (NDC) paradigm in the ongoing reforms of retirement provision in China. It finds that mature age life expectancy is remarkably uniform among formal sector workers at the time of retirement, although greater heterogeneity does exist for Rural and Urban Residents Pension Scheme members. The implications of a stylized NDC structure are examined covering China’s major pension systems, calibrated to be actuarially neutral. Each system has a different contribution rate and retirement age, consistent with different life expectancies. A complementary social pension is also proposed. The paper concludes that an increased presence of the NDC paradigm has the potential to raise aggregate welfare.
Citation
Lu B., Piggott J., Zheng B.,(2019) The notional and the real in China’s pension reforms, Roma, INAPP, WP, n. 32 <https://oa.inapp.org/xmlui/handle/20.500.12916/469>
URI
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Working Paper
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