The reform of pensions is becoming clearer: personal contributions are only booked and there is no real money.

Since the basic pension system began to introduce personal accounts 28 years ago, the dispute over personal accounts has never stopped.
Over the years, the controversy over whether individual accounts have been “deposited” or “discarded”, “bigger” or “small”, “actually” or “short” has not been eliminated by the repeated decision of the central document. On the contrary, differences still exist in the theoretical and practical aspects, either explicitly or implicitly.
In November 2013, the Third Plenary Session of the 18th Central Committee of the Communist Party of China changed the “Practical Personal Account Pilot” to “Complete Personal Accounts”. The industry has made huge differences in the path of improving individual accounts. The core of the dispute is whether the personal accounts should be Switch to a nominal account and whether you need to expand your personal account.
The first financial reporter learned from many industry insiders that after more than two years of fierce controversy, the reform path of personal accounts has gradually become clear: personal accounts are no longer implemented, and 8% of personal accounts are recorded as personal interests. Win more consensus. However, industry insiders expect that the plan to improve personal accounts will not be determined until after the 19th National Congress.

The fate of personal accounts is more than the long-term direct participation of China's social security system design and reform process since the 1980s. He said at the recent personal accounts seminar on pension insurance that since the introduction of personal accounts in the basic pension insurance in Shenzhen and Hainan provinces in 1989, the dispute over personal accounts has been carried out for four rounds.
The core of the first round of controversy before the Third Plenary Session of the 14th CPC Central Committee in 1993 was the introduction of personal accounts. The second round of controversy occurred between 1996 and 1997, with the core being about the size of individual accounts. Although the State Council decided to implement a system that combines account and account, it also recommended two sets of programs, one for the large account of the Sports Reform Commission and one for the small pool of the Ministry of Labor.
The combination of unified account and account has diversified in the implementation, and the scale of individual accounts is not uniform, from the lowest 4% to the highest 17%, which brings a lot of contradictions to the reform of the pension system. Song Xiaotong said that the employees of Hubei Province at that time reflected that they were in Wuhan, but there was no way to transfer them from provincial enterprises to Wuhan municipal enterprises because the size of personal accounts was different.
The year 2000 was the third climax of personal account disputes. Judging from the situation of the seminars in the past, the views against individual accounts clearly did not prevail. Most institutions and scholars are in favor of continuing to adhere to the system model of “combining accounts and accounts”.
The State Council finally decided to maintain a system of combining account and account, but the personal accounts should be small and solid. Since 2001, Liaoning, Jilin, and Heilongjiang have started pilot projects, but they have encountered unprecedented difficulties in the process of making personal accounts. The pilot of personal accounts in 2008 has been expanded to 13 provinces, some of which have also signed commissioned operating agreements with the National Social Security Fund Council, but no provinces are willing to join since then.
It is understood that by 2010, the central government will temporarily suspend the pilot subsidy for the earliest real-life account in Liaoning Province, and specifically approve the payment of pensions from Liaoning Province to the already-implemented personal account fund, which means that Liaoning will do The pilot of real personal accounts has almost failed.
Li Zhen, a professor at the School of Public Administration of Renmin University of China, said that the Social Insurance Law promulgated in 2010 only clarified the system model of combining account and account, but evading individual accounts to do practical problems. At this point, the actual personal accounts began to waver in policy.

The dilemma that personal accounts do not expand the “real” personal account pilot in reality is that due to the serious imbalance in regional development, individual accounts in underdeveloped regions are difficult to implement, and due to low investment efficiency, coastal developed regions can be implemented. But not willing to do it.
In the communiqué of the Third Plenary Session of the Eighteenth Central Committee, the improvement of personal accounts replaced the previous personal accounts. The dispute over personal accounts also ushered in the fourth climax. The focus of this dispute is whether to implement a nominal account and whether to expand the proportion of personal accounts.
The debate began at the end of 2014, when the then Minister of Finance Lou Jiwei believed that the actual personal account was no longer sustainable, and the nominal personal account (NDC) was the next step to improve the personal account of the pension insurance. He supported the expansion of the individual. Account reform program.
People familiar with the matter said that the Ministry of Finance had calculated 28%, 16%, and 8% of nominal personal accounts. The purpose of expanding personal accounts was to improve the incentive mechanism of the pension insurance system and increase sustainability.
A group of social security scholars and officials, including Song Xiaotong, opposed the expansion of personal accounts, especially against the zero-coal "full account" without any social cohesion.
Song Xiaolan believes that in the case that China's once-distribution gap is already too large, the basic pension insurance system for employees should be improved, and the principle of fairness and mutual benefit should not be deviated. The direction of narrowing rather than expanding the initial distribution gap cannot be deviated.
Zheng Gongcheng, president of the China Social Security Association, said at the above-mentioned seminar that in a multi-level system, public pensions must be attended by the government and act as credit guarantors, effectively providing stable security expectations and making the people always trustful; The so-called overpayment and incentive mechanism is weakened by the value conflict with the social equity pursued by the public pension system.
Zhu Qing, a professor at the School of Finance at Renmin University of China, believes that there are two original intentions for establishing a personal account system. One is to introduce individual contributions, and the other is to accumulate pension funds and increase the savings rate to promote economic growth.
He said that it is not appropriate for proponents to expand their personal accounts to refer to the housing provident fund, because the housing provident fund is an institutional project that can benefit in the short term, while the basic old-age insurance system is a long-term system, and the insured must enjoy treatment at least 35 years later. The housing provident fund and the basic pension insurance have different attributes and cannot be used for reference. Therefore, it is not recommended to expand the scale of payment for individual accounts.
People familiar with the matter said that the central high-level officials have adopted the proposal of insisting on the fairness and mutual benefit of pension insurance. The “overpayment” has also faded out of the central document in the past two years.
Although the expansion of personal accounts is not the future direction of reform, the nominal account has become a good medicine to solve the current personal account empty account.
The scientific name of the nominal account system is “nominal payment determination type”, and its essence has two points: the pay-as-you-go system is implemented on the financing method, and the payment payment type is adopted in the payment method. In short, in the future, there is no real money in the personal account, but the personal contribution is recorded, and the payment and the income are included in the account as the basis for future payment.
Song Xiaotong said that the current preferred plan is still to maintain the existing system of unified account and account, but it is difficult to make a personal account based on it. Changing the 8% personal account paid by the current employee to a nominal account will achieve a smooth transition effect and guarantee the system. Social mutual aid.
The nominal account means that the future pension insurance personal account will no longer be actual but only as a personal record of the insured payment, and the endowment insurance fund will literally return to the pay-as-you-go system.
The move of a personal account to a nominal account is the result of a compromise to reality. Although the nominal account can legalize the empty account, it can alleviate the financial burden to a certain extent, but it cannot fundamentally resolve the contradiction between the private nature of the personal account and the social co-ordination.
Song Xiaotong said that he has always opposed the introduction of personal accounts in the basic pension insurance system. Over the years, he has insisted on the principle of doing small things in the practice of personal account reform. This proposal puts a nominal account system on 8% of individual accounts, taking into account the maintenance system. Compromise in stability and continuity. He said that if the personal account can be reduced to 5%, the basic pension system will have a better effect.

Endowment insurance returns to the pay-as-you-go system?
In 1966, the famous American scholar Henry Allen proposed the famous "Aaron Condition" in the paper "Social Insurance Paradox". He said that if the sum of per capita wage growth rate and population growth rate exceeds interest rates, then the introduction of pay-as-you-go social pension funds can improve the welfare status of everyone.
Zhu Qing believes that China's actual national conditions are in line with Allen's conditions, that is, the sum of China's real wage growth rate and population growth rate is much higher than the actual rate of return, so it is more efficient to establish a pay-as-you-go system in China. There is no need to establish a fund system.
Wang Xinmei, assistant researcher of the Institute of Population and Labor Economics of the Chinese Academy of Social Sciences, has long focused on the personal accounts of pension insurance. After studying the development of accumulated pensions in Chile, Singapore and many developed countries, she proposed that the private pension of the World Bank be implemented by the World Bank. Reform is based on false assumptions.
Wang Xinmei said that in the global pension reform over the past 20 years, the accumulative system proposed by the World Bank and other international financial institutions can cope with the aging of the population structure. Both in theory and in practice, it has been rejected by all developed countries. .
Yang Jun, an associate professor at the China Social Security Research Center of Renmin University of China, believes that the low level of pension benefits for the Chilean personal account reform initiated in 1981 has already caused strong opposition from the participants; the incentive function of the personal account system is actually very limited, many people Both are only maintaining the minimum required contribution period, and many people have fled the system.
Zhou Hong, a member of the Chinese Academy of Social Sciences, believes that some discussions about personal accounts currently confuse the country and the market. Usually, public pensions are divided into two levels. One is a basic pension that reflects fairness. The other is a supplementary pension that reflects income differences. It is a bit like a personal account in China. Both are pay-as-you-go, investment. Very few parts. A true personal account is a market behavior.

From the combination of unified accounts and the separation of accounts, Zheng Gongcheng said that more than 20 years have proved that one of the major mistakes in the reform of China's pension insurance system is to simply introduce fully privatized personal accounts into the basic pension insurance system in the absence of rational argumentation. Not only damages the publicity and stability of the pension insurance system, but also causes a series of bad sequelae.
Li Zhen opposed the introduction of personal accounts in basic pension insurance from the very beginning of the establishment of the system. She believes that the theoretical dilemma of urban workers' basic pension insurance mixed into social insurance is that personal accounts are private property, and they are not insured. It is theoretically unreasonable to embed it into social insurance.
Li Zhen told the First Financial Reporter that it is precisely because of the mixture of private property rights in the system of “combining accounts and accounts” that no one in practice is willing to work hard and actively participate in the payment of overpayments due to the design of the personal account system. The motivational hypothesis theory has not been realized.
"In the past, we wanted to realize the basic old-age insurance system through the combination of unified accounts, and we must have fairness and stimulating good wishes. In practice, it proved difficult to complete. The final result is that the combination of accounting and accounting becomes a 'Miggy'." Song Xiaoyu said.
Li Zhen believes that the implementation of a nominal account means “shortening” a personal account.
The fundamental difference between a nominal account and a bank account is that the depositor is paid to the bank by real money, the bank gives savings interest after the investment income, and there is no money in the nominal account. The individual pays the money and has already paid out the pension for the retirees. It is.
“If the interest rate is low, the account holder is damaged, and if the interest rate is high, the next generation will be damaged.” Li Zhen said that after the reform, if the interest rate is calculated at the one-year bank rate as before, the insured person is damaged. And the personal account pension level is low; and if the higher interest rate is included, a large amount of debt will soon be accumulated.
Li Zhen believes that, unlike social pooling, the liabilities on personal accounts are hard-constrained. In the future, it is impossible to reduce the expenditure on pensions through the adjustment of calculation formulas. This means that the burden of the incumbent generation will be heavier and will drag down the Chinese economy. development of.
Therefore, Li Zhen suggested that the personal accounts of employee pension insurance should be separated from the social endowment insurance, so that the insured can establish a voluntary savings pension system, which will reduce the distortion caused by government intervention. At the same time, the separation of personal accounts also needs other parameters to reform, otherwise the balance of payments will be problematic.
"If the reform is only to change the pension insurance arranged by the state and enterprises into the social pension insurance system, without introducing personal accounts, and then promoting the development of enterprise annuity and commercial endowment insurance on the basis of this system, then China's pension insurance system reform will It will be much smoother." Zheng Gongcheng said.
The academic circles have proposed a variety of programs to improve individual accounts. Among many programs, the separation from the unified account to the separation of accounts is considered to be a fundamental solution, allowing the government to return to the government and the market to the market.
However, the separation of accounts and accounts requires “big surgery” for the current system. It is still difficult to become a realistic option for improving personal accounts. The pension insurance reform still has a long way to go.

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