Pension levels of chinese institutions during the transition period: A case study of universities.

Abstract

With China's rapidly aging population, the combined effects of this demographic shift and a growing wave of retirements present significant challenges for the sustainability of the basic pension system. To address these issues, China initiated reforms to the basic pension insurance system for institutions, including universities, on October 1, 2014, establishing a ten-year transition period. As this period nears its end, it is essential to analyze changes in retirement benefits for institutional retirees over the past decade. This study used representative data from retired employees in various post categories at Jiangsu universities, covering two periods: before the transition (prior to September 30, 2014) and during the transition (October 1, 2014, to December 31, 2023). The dataset included 1,200 retirees before the transition and 3,720 retirees during the transition. The income of retired university employees rose significantly before and during the transition period, with transition incomes surpassing those from earlier phases and stabilizing afterward. This increase was mainly due to the introduction of the occupational annuity system. Factors such as gender, retirement year, retirement age, payment index, post category, and level affected pension payment levels to varying extents. Notably, cumulative years of payment influenced by gender and other factors had the greatest impact on these levels. The implementation of the occupational annuity system during the transition period revealed certain shortcomings in the endowment insurance reform. The transitional pension from the Social Collective Fund represents a significant portion of total pension expenditure, creating a heavy financial burden on the fund. Additionally, extending and standardizing retirement age for men and women can help reduce gender income disparities. Delayed retirement alleviates pressure on social pension systems by increasing individual incomes and aligning pension levels with societal needs. This approach promotes social equity and provides adequate care for older adults.