China's Three-Pillar Pension Insurance System: How the Third Pillar Complements the Gap in the First Pillar
DOI:
https://doi.org/10.63313/EBM.9039Keywords:
Basic Pension Insurance, Personal Pension, Three-Pillar SystemAbstract
This paper explores the functional positioning and implementation path of the third pillar in China's pension system to address the funding gap in the first pillar. The study finds that China is facing severe population aging, with the replacement rate of the first pillar continuously declining and the fund's return rate remaining low, making it difficult to cope with the payment pressure brought by an elderly population exceeding 30% in the future. Although the third pillar started late, it has the potential to supplement the lack in the first pillar through market-based investment, tax incentives, and an account accumulation system. However, the third pillar faces challenges such as high account opening rates but low contributions, limited investment products, and low returns. Drawing on international experience, this paper proposes policy recommendations such as optimizing tax policies, diversifying investment products, and enhancing public recognition to provide decision-making references for building a multi-tiered pension security system in China.
References
[1] Jing, W., Yang, Y. (2024). The status and policy suggestions for China's personal pensions under the third pillar. Finance, 2024 (144), 1567-1575.
[2] Lu, J., Yang, Y. (2019). The third pillar pension: Theoretical sources, security strength, and development paths. Research on Financial Issues, 2019 (10), 86-94.
[3] Chen, W., et al. (2023). Multi-tiered and multi-pillar pension systems: A review of reforms and optimization ideas. Operations Research and Fuzzy Studies, 2023 (13), 26-34.
[4] Xie, Y., Fei, P., Yang, Y. (2022). China's multi-tiered and multi-pillar pension system: Cur-rent situation, challenges, and reforms. International Labour Organization Review, 2022.
[5] Li, L. (2022). Third pillar personal pensions: Development experiences and lessons from the United States, New Zealand, and Canada. International Finance, 2022 (11), 29-34.
[6] Cribb, J., Emmerson, C., Johnson, P., et al. (2023). Challenges for the UK pension system: The case for a pensions review. IFS Report.
[7] Ebbinghaus, B., Wiß, T. (2011). The governance and regulation of private pensions in Eu-rope. The Varieties of Pension Governance: Pension Privatization in Europe, 351-383.
[8] Wang, L., Liu, J. (2024). The personal pension system: Development logic, international references, and policy suggestions. Finance, 2024, 14 (3), 1102-1111.
[9] Sun, S., Chai, Y. (2019). The third pillar pension: Theoretical sources, security strength, and development paths. Social Security Research, 2019, 6, 87-94.
[10] Lin, Y., Zhou, Y. (2016). The German Riester pension plan and its implications for China. Social Security Research, 2016, 6, 63-70.
[11] Li, Y., Yuan, M. (2018). Pension financialization reforms in the UK and their implications for China. Financial Research, 2018, 6, 1-15.
[12] Tuo, H., Yang, Y. (2020). Pension systems and reforms: Analysis based on different welfare models. Chinese Social Security, 2020, 2, 11-16.
[13] Zhang, M., Cao, P. (2023). China's pension finance: Current situation, issues, and suggestions. International Monetary Network, 2023.
[14] Li, C. (2024). A review of tax incentive policies for third pillar personal pensions. Insurance Research, (07):64-74+127.
[15] Yin, S. (2024). Evaluation and optimization of China's personal pension tax policy. China Fiscal Science Research Institute.
Downloads
Published
Issue
Section
License
Copyright (c) 2025 by author(s) and Erytis Publishing Limited.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
How to Cite
