A few days ago, the State Council issued the Implementation Plan for Transferring Part of State-owned Capital to Enrich Social Security Fund. The plan is clear. Starting from 2017, some central enterprises and some provinces will be selected for pilot projects, and 10% of the state-owned shares of enterprises will be uniformly transferred to enrich the social security fund to make up for the gap in the basic endowment insurance fund for enterprise employees caused by the implementation of the policy of deemed payment period. What is the "gap of deemed payment period"? Does the transfer of equity mean that the ability to pay for endowment insurance is insufficient? What is the impact on state-owned enterprises and capital markets after the transfer? On related issues, Beijing Youth Daily reporter interviewed Nie Huihua, vice president of the National Development and Strategy Research Institute of Renmin University of China.
"The more underdeveloped areas, the greater the pressure on social security payment."
The "Proposal" clarifies that the basic goal of transferring some state-owned capital is to make up for the gap in the basic endowment insurance fund for enterprise employees caused by the implementation of the policy of deemed payment period, and promote the establishment of a fairer and more sustainable endowment insurance system. Where does this gap come from?
Beiqing Daily: Why is there a gap that is regarded as the payment period?
Nie Huihua: First of all, this is caused by the window period of policy implementation. This is the gap left over from the initial stage of the basic old-age insurance system for employees of state-owned enterprises that employees who have already taken part in the work have not paid the fees, but are regarded as paying the fees.
Our state-owned enterprises and institutions have long implemented a low-wage and high-welfare system. At that time, these units paid less wages to employees, and by default they had to bear the obligation of providing for the elderly for employees, which was an invisible contract between the state and individuals.
The later policy, that is, the current social security system was formed around 1997, that is to say, only after 1997 did units and individuals pay social security on a large scale. If there are employees who have joined the work before 1997, and the period of social security payment does not meet the requirements of 15 years, then they will not get a pension simply from the policy point of view. Therefore, the policy stipulates that before the establishment of this system, the continuous length of service of on-the-job employees is generally treated as the deemed payment period, and it is reflected in the calculation of pension benefits, which forms the income and expenditure gap of the pension fund brought about by the deemed payment period.
Beiqing Daily: How big is this gap?
Nie Huihua: It’s hard to calculate the exact number of people and money, but it should not be less. According to the data, by the end of last year, the number of elderly people over 60 had exceeded 230 million, accounting for 16.7% of the total population, and the number of elderly people over 65 had exceeded 150 million, accounting for 10.8% of the total population. Obviously, the gap will not be too small.
Beiqing Daily: According to the statistical bulletin of the Ministry of Human Resources and Social Security in 2016, the accumulated balance of basic old-age insurance at the end of last year was more than 4 trillion yuan, indicating that there is no gap in pensions at present. Why did you choose to transfer state-owned shares to enrich the social security fund now?
Nie Huihua: There is no gap, which means there is no problem in the total volume, but there are structural problems to be solved.
China’s regional development is very uneven, and the degree of aging is also very different. Some areas, especially the underdeveloped areas in the central and western regions and the northeast region, belong to the outflow of young people and the stay of old people. The northeast problem that everyone was discussing some time ago is that there are many state-owned enterprises, many elderly people, and the economy is not yet developed. A large number of people, especially young and middle-aged working people, have left, and those who can earn money to pay social security have left, leaving behind those who need social security payment. For example, the Ministry of Human Resources and Social Security has said before that the dependency ratio in Heilongjiang is 1.3:1, 1.3 people support one person, and in Guangdong it is 9:1, and 9 people support one person. The imbalance between these regions is a structural problem.
Therefore, the less developed areas are, the heavier the burden of old-age care is, and the greater the pressure of social insurance payment. The more developed areas, such as the southeast coast and the north, Guangzhou and Shenzhen, have a much smaller burden.
It is not abrupt to announce the implementation plan now. Scholars called for the transfer of some state-owned capital to enrich the social security fund five or six years ago, and the relevant state departments also mentioned it three or four years ago. In fact, it is a decision that has been prepared for a long time.
"The transfer of 10% equity should have no impact on state-owned enterprises."
The "Proposal" proposes that some central enterprises and some provinces should be selected to carry out pilot projects this year. Central enterprises include 3 to 5 central management enterprises supervised by the State Council SASAC and 2 central financial institutions. What effect does the transfer of equity have on them?
Beiqing Daily: How many enterprises can be involved in the transfer scope, and how thick is their family background?
Nie Huihua: From the family background, the strength of central enterprises is relatively strong, and the provincial enterprises are not bad. There are basically no entity state-owned enterprises at the county level, one is platform, and the other is public utilities, which basically do not make money, and the strength of public institutions is relatively weak. The implementation plan stipulates that the central and local state-owned and state-controlled large and medium-sized enterprises and financial institutions should be included in the scope of transfer. It is estimated that there should be about 5 to 7 pilot central enterprises, and 3 to 5 at the provincial level, which is a very stable state. The state-owned enterprises that can be selected should also be rich.
Beiqing Daily: What is the impact of transferring 10% equity on these state-owned enterprises?
Nie Huihua: For them, a 10% stake is just another small shareholder. This shareholder is not involved in decision-making and daily management, but they can use the income generated by this 10% stake, and the equity itself cannot be sold.
In 2015, Shandong Province proposed to transfer 30% of the provincial state-owned capital to enrich the social security fund, which is much larger than the 10% in the current plan, so they asked to participate in major decisions and send directors, but they did not interfere in the daily management of state-owned enterprises. At present, 10% of the shares of central enterprises may not be necessary to send directors, let alone affect daily management and operation.
As far as profit is concerned, a 10% stake is a 10% profit, and it is "left pocket to right pocket". Even if it is not transferred, state-owned enterprises have to pay profits and taxes. Now 10% of the proceeds are given to the social security fund, and taxes are not paid by state-owned enterprises. I think the social security fund should not be taxed. Therefore, the transfer of 10% equity should have no impact on state-owned enterprises.
Beiqing Daily: Why is the equity transfer to the social security fund instead of directly to the endowment insurance fund?
Nie Huihua: To answer this question, we must first clarify two concepts. Social security fund refers to social security fund, which is a strategic security reserve fund. It is specially used to supplement and adjust social security expenditures such as endowment insurance during the peak period of population aging, and it is not directly paid to individuals. Social insurance fund is a general term for basic old-age insurance fund, basic medical insurance fund, industrial injury insurance fund, unemployment insurance fund and maternity insurance fund, which is mainly formed by the contributions of units and individuals.
For example, the social security fund is the central bank, and the social insurance fund is an ordinary commercial bank. Only when the commercial bank has insufficient money will the central bank use its reserves. According to the data of the Ministry of Human Resources and Social Security, there is no substantial gap in the social insurance fund. Therefore, transferring the equity to the social security fund is a strategic investment and will not be used in the short term.
Beiqing Daily: How does the social security fund operate after the equity transfer?
Nie Huihua: You can make long-term investment, even equity investment, or enter the stock market, and the third party can manage money. These are all things that social insurance funds cannot do. Because the social insurance fund has to pay in the short term, the social security fund doesn’t have to. Just like an individual’s five-year deposit can be used for investment and financial management, but it can’t be used for demand deposits.
"For example, Taobao shop owners suggest paying social security for jobs."
Yin Weimin, Minister of Human Resources and Social Security, said that when the old-age insurance system was established more than 20 years ago, the population dependency ratio was 5: 1, and now it has been continuously reduced to 2.8: 1. With the acceleration of population aging, what other measures can ensure the sustainable operation of endowment insurance?
Beiqing Daily: From the perspective of solving the laid-off workers in zombie enterprises, you and your team have proposed to allocate state-owned assets to enrich the social security fund for two consecutive years. What is the specific content?
Nie Huihua: Now there are zombie enterprises in many places. The main problem of zombie enterprises is laid-off workers, and the main problem of laid-off workers is social security. We have calculated that a 45-year-old laid-off worker who wants to live a "decent" life for the rest of his life needs a maximum of 200,000 yuan per person, which the average government and enterprises can’t afford. Therefore, we suggest that part of the state-owned assets be allocated to establish a guarantee or resettlement fund for zombie enterprises and extremely poor enterprises.
Beiqing Daily: There is no specific mention of zombie enterprises in the implementation plan announced by the Ministry of Finance.
Nie Huihua: Yes, the current plan only talks about transferring the equity of state-owned enterprises to enrich the social security fund, but we think we can cut off a part of this 10% equity as an emergency expenditure for the laid-off workers. I will mention this suggestion again. Now that the existing policies have been solved, it should not be so difficult to operate. The premise is established and it is only a matter of specific distribution. Moreover, we are still investigating the number of laid-off workers. Because of the changes in the employment system of state-owned enterprises, there are more contract workers and temporary workers, and the actual number of laid-off workers who need to be resettled is less than expected.
Beiqing Daily: China’s aging is becoming more and more serious. What needs to be reformed in the existing endowment insurance system? What suggestions do you have?
Nie Huihua: First of all, we should broaden the scope of payment of endowment insurance. In the current environment, there are more and more freelancers, such as many Taobao shopkeepers and part-time workers, who have worked but have not paid social insurance. I suggest that the social security system based on the unit system should be broadened to work-based system, and insurance should be paid as long as there is a job, so as to enlarge the pool of social security.
The second is to encourage the population to have children. Social security is not pay as you go, but intergenerational transfer payment. The gap is not terrible, the terrible thing is that no one will take over, so there must be enough young and middle-aged labor. Moreover, to encourage childbearing, not only the family planning policy should be relaxed, but also a series of supporting policies such as the child care system and the domestic service system should be kept up.
Third, the promotion of cross-regional transfer payments requires a coordination mechanism at the central level. This is the problem of regional imbalance mentioned just now. Developed areas have absorbed a large number of young and middle-aged laborers, and the payment pressure is not great. Underdeveloped areas have left many elderly people, and the payment pressure is great. The premise of social insurance is intergenerational transfer payment, and now it is artificially divided into regions.
Therefore, developed areas have absorbed the demographic dividend of underdeveloped areas and should be compensated.
This group/reporter Dong Xin
