European Experience and Best Practices

in Pension Reform

SELECTED TECHNICAL NOTES

FOREWORD

TO NOTES

The EU-China Social Protection Reform Project Component 1 is actively contributing to the on-going reform of the Chinese pension system, in close collaboration with the National Development and Reform Commission – NDRC – and other key national and provincial stakeholders.

Over project life, a number of technical research, exchanges and dialogues have been conducted, addressing a great variety of technical topics, and reporting the wealth of European experience in the various aspects of social protection reform to the Chinese reality and prospects.

While these activities have been duly documented and enshrined in a very rich and detailed series of publications and report available notably from the project website in English and in Chinese languages, it was felt useful to supplement this scientific documentation with a set of short notes, presenting in a concise yet accessible manner the fundamentals of European experience in main pension reform topics, as those might be relevant for the Chinese – and indeed other countries’ endeavors to improve upon their respective existing systems.

The following presents 22 such Notes, covering 12 technical topics. Their contents is derived from project works, be it works under the current project or under its predecessor, the EU-China Social security reform project (2006-2010).

Most of the Notes are authored by the undersigned, who takes full responsibility for their contents. However, it is a pleasure to hereby acknowledge the kind and very efficient collaboration of Koen Vleminckx, Director of Research and International cooperation, Federal Public Service Social Security, Belgium, who on the occasion of a mission conducted under the auspices of the Project, contributed several Notes in direct response to requests by the Chinese stakeholders.

A Preface has also been included, which draws a lot on project technical works to present the most striking features of the Chinese pension system, which in a sense justifies the choice of the topics to which individual Technical Notes are devoted.

Great thanks are due to my colleague Mr. Fang Lianquan from the EU-China SPRP Component 1 and from the Chinese Academy of Social Sciences, who carefully read a first version of this preface, and made a number of very useful suggestions for its improvement.

Jean-Victor Gruat,

Resident Expert

EU-China Social Protection Reform Project

August 2017 v.4

CONTENTS

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TOPICS	NOTES
PREFACE	0 – Striking features of the Chinese pension system
PENSION REFORM	0 – Selected Pension reforms in Europe
MANAGEMENT REFORM	111-Fraud
PENSION SCHEME EVALUATION	122-General principles for pension reform
	122-Social security performance indicators
	122-Evaluation of Social security
AFFORDABILITY OF PENSION SCHEMES	123-State budget financing
GENDER	124-Gender considerations
REFORM FOR PUBLIC SECTORS	131-Reform of public pension schemes
MULTITIER PENSION SYSTEMS	134-Multitier pension systems
PARAMETRIC REFORM	0 – Selected Pension reforms in Europe
	136-Extending working life
	136-Parametric-Minimum standards
	136-Indexation
DEMOGRAPHIC AGEING	137-Demography and social security
	137-Long term care insurance
	137-Retirement Age
NOTIONAL DEFINED CONTRIBUTIONS	139-NDC European Best Practices
	139-NDC self-financing
INDIVIDUAL ACCOUNTS	141-Adjusting for Longevity
	141-Adjusting individual records
	141-Regulations for Funded schemes
VESTING AND PORTABILITY	143-Principles of Coordination (migrant workers)
	143-Social insurance for mobile workers in Europe