Endowment Insurance 101（3）

Institutional model

There are three models for implementing pension insurance systems in countries around the world:

Traditional

The traditional pension insurance system is also known as employment-related programs or the public assistance model of self-insurance. It was created by the Bismarck government in 1889 and promulgated by the pension insurance law, which was later passed by the United States, Japan, and other countries. Individuals receive a salary replacement rate for pensions and then use the expenses to determine the total contribution rate.

The right of an individual to receive pensions is linked to the obligation to pay, i.e. the contribution of the individual is a prerequisite for receiving pensions, the level of the pension is linked to the personal income, and the basic pension is based on the average monthly indexed salary of pre-retirees over the years and the replacement rate of the different grades To calculate and adjust automatically and regularly. In addition to basic pensions, the state also encourages companies to establish supplementary pension insurance through preferential tax and interest policies, and also implements a tiered pension insurance system. .

National swimming pool

There are two types of universal programs:

(1) The place generally adopted by the welfare state, also known as social protection pension insurance, was first created for the United Kingdom. Today, the countries that apply to this type are Sweden, Norway, Australia, Canada, etc.

The system is characterized by the establishment of a complete "pay-per-use" system and the pension level is determined according to the "payment determination" method. Old age insurance premiums are all derived from government taxes and individuals do not have to pay. The enjoyment of the pension is not only reserved for workers, but also for all members of society. The level of pension protection is relatively low and generally only guarantees a minimum standard of living rather than a basic standard of living. For example, the level of pension treatment in Australia is only 25% of the average wage. In order to solve the problem of the low level of basic pensions, companies are generally strongly encouraged to set up a professional pension system to compensate for the lack of basic pensions.

The advantage of this system is that it is simple and easy to use and, thanks to the redistribution of income, it provides basic life security for the elderly to offset the negative impact of the market economy. But the system also has obvious shortcomings, and the immediate consequence is that the government is overburdened.

Since the equivalent of government revenue is used for social security spending, and after maintaining such social security spending, the government must adopt a high tax policy, which increases the burden on businesses and taxpayers. At the same time, members of society generally benefit from pension insurance treatment, a lack of incentive mechanisms for individuals, and only emphasize equity and ignore efficiency.

(2) Another type of national pooling was created by the location of the Soviet Union. Its theoretical basis was Lenin's national insurance theory, which was then adopted by the countries of Eastern Europe, Mongolia, North Korea and China before the reform.

This type is the same as the welfare state pension system. It is the State which takes over pension insurance and fundraising activities and implements a uniform level of insurance treatment. Individual workers do not need to pay contributions and can benefit from pensions after retirement. However, unlike the old location, the applicable objective is not all members of society, but workers, and the pension is only one level. Pension insurance at several levels has not been established and the level of pension is generally not adjusted regularly.

Mandatory savings

There are two types of compulsory savings: the Singapore model and the Chile model.

(1) The Singapore model is a provident fund model. The main feature of this model is to focus on self-protection and to create a personal pension account. Workers pay pension insurance premiums to their employer during their employment. After retirement, workers receive pensions in full from personal accounts and the state no longer pays pensions in any form. gold. The personal account fund can be collected with interest at the same time after the worker's retirement, or it can be collected in batch payments.

State funds for personal accounts are managed and operated through the Central Provident Fund Bureau in a unified manner, which is a comprehensive mode of fundraising. Besides Singapore, some developing countries such as Southeast Asia and Africa have also adopted this model.

(2) Another compulsory savings model, the Chilean model also emphasizes self-protection and adopts the personal accounts model. However, unlike the Singaporean model, the management of personal accounts is completely privatized, that is to say that personal accounts are transferred to self-financing. Private old-age nutrition insurance companies provide the maximum rate of return, while setting up a minimum pension insurance system. After its launch in Chile in the 1980s, the model was followed by certain Latin American countries. The most important feature of the compulsory savings-type pension insurance model is the emphasis on efficiency, but neglecting equity makes it difficult to reflect the guarantee function of social insurance.