Pensions International, no. 10, 1999, p. 16-19
Given China's growing ageing population, it has become increasingly important for the government to find reliable and cost effective ways to support its elderly citizens. China is in a good position to make a switch from an unsustainable pay-as-you-go system to a partially funded multiple pillar system given its low level of coverage, low implicit pension debt and relatively low transition costs. The new system divides responsibility for caring for the elderly among employers, government and individuals, and allows workers to take their pensions with them in an increasingly mobile labour market.
S Shmanske, H K Jadhar and T J Wells
Journal of Social Political and Economic Studies, vol. 74, 1999, p. 203-224
Paper calculates the "turning point age" after which a person expects to receive a fair return on remaining payments into the social security system. Until this age, the person would be better off saving the equivalent of his social security contributions in a tax preferred account. Pressure for social security reform and outright privatisation will therefore come from young voters.