We will improve the multi-level old-age security system and standardize the development of the third pillar old-age insurance

2022-04-24 0 By

At present, China is accelerating into an aging society, which brings both impact and opportunities.Aging represents the progress of human civilization, and every country must go through this stage in its modernization process.According to the National Bureau of Statistics, by the end of 2021, the population aged 60 and above in China was 267.36 million, accounting for 18.9 percent of the national population, among which the population aged 65 and above was 20.56 million, accounting for 14.2 percent of the national population.According to the World Bank, the proportion of the population aged 65 or above will be 13 percent in 2025 and 20 percent in 2035, meaning that one in five people will be aged 65 or above.In the next few years, the number of elderly population will usher in a new peak, which will have a profound impact on economic and social development.Aging is an inevitable trend of social development. The average life expectancy of China has increased from 35 years in the early years of the People’s Republic of China to 77.3 years now.To actively respond to aging is a long-term process that requires a comprehensive approach.Finance has an important supporting role to play in dealing with accelerating population ageing.Implementing the relevant national policies and arrangements, developing a multi-level and multi-pillar pension insurance system, and accelerating the financial development of pension are important measures to actively respond to the aging of the population, and are of great and far-reaching significance to promote the sustained and healthy development of China’s economy and society during the 14th Five-Year Plan period and beyond.At the same time, China should accelerate the development of pension service finance and pension industry finance, and increase the supply of excellent pension services.The third pillar of endowment insurance is an important part of China’s endowment security system and a short board that needs to be repaired.The executive meeting of The State Council held on December 9, 2021 pointed out that “the construction of commercial endowment insurance into the third pillar of old-age security will be accelerated”.Commercial insurance has a great role to play in addressing the challenges of rapid aging of population, meeting the diverse needs of the people for the elderly, and enhancing the sustainability of the old-age security system.Currently, China is the world’s second largest economy, but it is still in a middle-income stage of development, with a per capita GDP of just over $10,000.It should be said that the arrival of the aging society indicates that the market potential of China’s pension industry is huge, providing good opportunities and greater development space for the development of pension and health related industries.For commercial insurance, it not only poses severe challenges, but also brings unprecedented development opportunities.After years of development, China has gradually established a multi-level (three pillar) endowment insurance system.The three pillars include basic old-age insurance (the first pillar), old-age insurance for employees and old-age insurance for urban and rural residents, covering nearly one billion people.More than 58 million people have been covered by supplementary old-age insurance such as enterprise (occupational) annuity (the second pillar).Individual savings endowment insurance and commercial endowment insurance (third pillar).Overall, China’s commercial endowment insurance is still in the primary stage of development.The premium income of pension annuity insurance accounts for only about 2% of life insurance, and the accumulated liability reserve accounts for less than 1% of GDP.The external environment for the development of commercial endowment insurance still needs to be improved, and the insurance industry itself also has some difficulties and problems to be improved.Under this background, the article discuss invited from regulators, finance and insurance industry experts, academics, discussed our country aging accelerated the development of financial services under the pension situation and challenges, and puts forward thoughts and Suggestions to related, explore to adapt to the situation of China financial services endowment career development path.The Central Economic Work Conference held in December 2021 proposed to “accelerate the national pooling of old-age insurance” and “deepen the market-oriented reform and internal and external opening-up of people’s livelihood services such as medical care and old-age care”.In December 2021, THE CBRC issued the Notice on Standardizing and Promoting the Development of Endowment Insurance Institutions, which cleared the original source, further standardizing the business of endowment insurance companies and guiding the healthy development of the third pillar of China’s pension system.China’s third pillar endowment insurance has a broad development prospect and is ready for development.This article is from Tsinghua Financial Review