Population Aging and Sustainability of Pension Funds

Abstract: In light of the nation's increasingly pressing aging problem, achieving sustainable development of China's pension insurance fund is a key objective of the country's present social security system reform. The first subject addressed in this paper is the connection between aging and the sustainability of the pension insurance fund. An econometric model can be used to illustrate how the aging population will reduce the basic pension insurance fund's balance rate. This will have an additional effect on the fund's income and expenditure balance, causing a payment gap and hindering the fund's capacity to develop sustainably. As such, a review of the national pension insurance program is carried out. From the perspectives of policy concerns and improvement ideas, we argue for the soundness and areas for development in the national pooling policy of pension insurance funds. The sustainability of pension insurance funds is the ultimate goal, and it also helps with the difficulties brought on by shifting demographics and the pressure on pension insurance fund contributions.