Do notional defined contribution accounts make sense as part of the old-age security mix for China?
Until quite recently, the Chinese pension system was an enterprise-based, pay-as-you-go, defined benefit scheme. In 1995, the decision was made to shift to a multi-pillar scheme that included a second funded defined contribution pillar. The transition is proving difficult. This article outlines an alternative second pillar that may make more sense for China, a pay-as-you-go notional defined contribution (NDC) pillar. This article has three goals: (1) to provide a brief history of pension policy in China, (2) to describe the NDC model, and (3) to assess the relative merits of the NDC alternative as a possible option for China.
Williamson
John B
JB
Department of Sociology, Center for Retirement Research, Boston College, Chestnut Hill, MA 02467, USA. jbw@bc.edu
Shen
Ce
C
D040561:Assisted Living Facilities / Q000191:economics*; D002681:China; D037921:Gift Giving; D049673:History, 20th Century; D049674:History, 21st Century; D012942:Social Sciences / Q000266:history; D012943:Social Security / Q000266:history*