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Calculation of the transition coefficient and moderate level of China's pension system unification

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  • Mu, Huaizhong
  • Yang, Ao

Abstract

In this paper, the transition coefficient of replacement rate is taken as the breakthrough point for studying the pension system unification of China's government and public institutions. We present the basic principles and mathematical model of the transition coefficient for the pension replacement rate based on horizontal unification and vertical transition characteristics using time smoothing methods. We construct a general measurement model for calculating the pension unification transition coefficient and further transform it based on the current policy and the moderate replacement rate. On this basis, we introduce the pension account rate of return in order to simulate the realisation of the transition coefficient and determine the characteristics of the transition coefficient under the different rates of return, thus providing an important reference for the coordinated development of pension unification transition and the individual and occupational pension accounts. Based on this, we put forward relevant countermeasures and suggestions.

Suggested Citation

  • Mu, Huaizhong & Yang, Ao, 2022. "Calculation of the transition coefficient and moderate level of China's pension system unification," Finance Research Letters, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003701
    DOI: 10.1016/j.frl.2022.103147
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