IDEAS home Printed from https://ideas.repec.org/p/wbk/wboper/31645.html

The Notional and the Real in China’s Pension Reforms

Author

Listed:
  • Bei Lu
  • John Piggott
  • Bingwen Zheng

Abstract

This paper discusses the potential expansion of the role of the notional defined contribution (NDC) paradigm in the ongoing reforms of retirement provision in China. It finds that mature age life expectancy is remarkably uniform among formal sector workers at the time of retirement, although greater heterogeneity does exist for Rural and Urban Residents Pension Scheme members. The implications of a stylized NDC structure are examined covering China?s major pension systems, calibrated to be actuarially neutral. Each system has a different contribution rate and retirement age, consistent with different life expectancies. A complementary social pension is also proposed. The paper concludes that an increased presence of the NDC paradigm has the potential to raise aggregate welfare.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Bei Lu & John Piggott & Bingwen Zheng, 2019. "The Notional and the Real in China’s Pension Reforms," World Bank Publications - Reports 31645, The World Bank Group.
    • Handle: RePEc:wbk:wboper:31645
    as

    Download full text from publisher

    File URL: https://openknowledge.worldbank.org/bitstreams/f9448b03-5061-5a4b-b558-0e23320896e1/download
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert Holzmann, 2017. "The ABCs of nonfinancial defined contribution (NDC) schemes," International Social Security Review, John Wiley & Sons, vol. 70(3), pages 53-77, July.
    2. Lu, Bei & He, Wenjiong & Piggott, John, 2014. "Should China introduce a social pension?," The Journal of the Economics of Ageing, Elsevier, vol. 4(C), pages 76-87.
    3. repec:wbk:wbpubs:6582 is not listed on IDEAS
    4. repec:wbk:wbpubs:7336 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Filipe Costa Souza & Wilton Bernardino & Silvio C. Patricio, 2024. "How life-table right-censoring affected the Brazilian social security factor: an application of the gamma-Gompertz-Makeham model," Journal of Population Research, Springer, vol. 41(3), pages 1-38, September.
    2. Martin Drees, 2025. "Resolving Aaron's Social Insurance Paradox," Papers 2504.00909, arXiv.org.
    3. Lu, Bei & Yang, Mingxu & Cumming, Robert G. & Stanaway, Fiona F., 2020. "Falls and impact on disability and healthy life expectancy in China: Evidence from the China Health and Retirement Longitudinal Survey (CHARLS)," China Economic Review, Elsevier, vol. 61(C).
    4. Gustavo da Costa Morais & Carolina Cardoso Novo & Mirian Picinini Méxas, 2021. "Notional Defined Contribution (NDC) Schemes: a pension system alternative," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(2), pages 1-18, Abril - J.
    5. Pierre Devolder & Susanna Levantesi & Massimiliano Menzietti, 2021. "Automatic balance mechanisms for notional defined contribution pension systems guaranteeing social adequacy and financial sustainability: an application to the Italian pension system," Annals of Operations Research, Springer, vol. 299(1), pages 765-795, April.
    6. Gustavo da Costa Morais & Carolina Cardoso Novo & Mirian Picinini Méxas, 2021. "Notional Defined Contribution (NDC) Schemes: a pension system alternative," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(2), pages 1-18, Abril - J.
    7. Carlos Vidal-Meliá & Manuel Ventura-Marco & Juan Manuel Pérez-Salamero González, 2018. "Actuarial accounting for a notional defined contribution scheme combining retirement and longterm care benefits," Documentos de Trabajo del ICAE 2018-16, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    8. Xu, Hongwei, 2019. "Physical and mental health of Chinese grandparents caring for grandchildren and great-grandparents," Social Science & Medicine, Elsevier, vol. 229(C), pages 106-116.
    9. Hind El-Houjjaji & Abdellah Echaoui, 2020. "Notional Defined Contribution Accounts: An Application To Morocco," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 25, pages 93-108, June.
    10. Gao, Han & Lu, Bei, 2025. "Reforming China’s public pension system: Fiscal sustainability and the challenge of formality-based inequality," Economic Modelling, Elsevier, vol. 153(C).
    11. Ce Shen & Jessica Johnson & Zhenhe Chi & John B. Williamson, 2020. "Does a universal non‐contributory social pension make sense for rural China?," International Social Security Review, John Wiley & Sons, vol. 73(2), pages 3-26, April.
    12. Frieden, Rob, 2017. "Grey nuances in the black and white debate over subsidized Internet access," Telecommunications Policy, Elsevier, vol. 41(10), pages 1017-1026.
    13. Gordana Matković & Katarina Stanić, 2020. "The Serbian Pension System In Transition: A Silent Break With Bismarck," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 65(225), pages 105-134, April – J.
    14. Carlos Vidal-Meliá & Manuel Ventura-Marco & Juan Manuel Pérez-Salamero González, 2018. "Social Insurance Accounting for a Notional Defined Contribution Scheme Combining Retirement and Long-Term Care Benefits," Sustainability, MDPI, vol. 10(8), pages 1-36, August.
    15. Fabrizio Culotta, 2021. "Life Expectancy Heterogeneity and Pension Fairness: An Italian North-South Divide," Risks, MDPI, vol. 9(3), pages 1-22, March.
    16. İmrohoroğlu, Ayşe & Zhao, Kai, 2018. "The chinese saving rate: Long-term care risks, family insurance, and demographics," Journal of Monetary Economics, Elsevier, vol. 96(C), pages 33-52.
    17. Wang, Leran, 2021. "Fertility, Imperfect Labor Market, and Notional Defined Contribution Pension," The Journal of the Economics of Ageing, Elsevier, vol. 20(C).
    18. Lorenzo Fratoni & Susanna Levantesi & Massimiliano Menzietti, 2022. "Measuring Financial Sustainability and Social Adequacy of the Italian NDC Pension System under the COVID-19 Pandemic," Sustainability, MDPI, vol. 14(23), pages 1-23, December.
    19. Wilke, Christina Benita & FOM Hochschule für Oekonomie & Management, KompetenzCentrum für angewandte (ed.), 2024. "Pension Reforms in the Nordic Countries and Germany: Conference Proceedings of the 2024 Annual Meeting of the German Society for Demography (DGD) by the Working Group on Demographic and Social Developments," KCV Schriftenreihe, FOM Hochschule für Oekonomie & Management, KCV KompetenzCentrum für angewandte Volkswirtschaftslehre, volume 8, number 307058, June.

    More about this item

    Keywords

    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wboper:31645. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tal Ayalon The email address of this maintainer does not seem to be valid anymore. Please ask Tal Ayalon to update the entry or send us the correct address (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.