This financing model is suitable for most social security plans, and it requires financing under the guidance of the principle of horizontal balance of payments in the near future. This financing model is characterized by the transfer payment of national income between different groups.

The advantages of pay-as-you-go are:

Convenient calculation and simple operation; The rate adjustment is timely and flexible, which is conducive to maintaining the balance of payments; The function of mutual assistance and benefit conducive to social security; Not doing or doing less fund precipitation can avoid the risk of fund depreciation caused by inflation.

The disadvantages of pay-as-you-go are:

The transfer payment between different groups will make the contribution and income of those who join the protection plan unbalanced in different periods; Because there is no capital accumulation in current income and current expenditure, it is not conducive to promoting the development of savings and capital market; In the case of serious social and economic risk accidents, the increase in the pressure of guaranteed payment will make it difficult to achieve balance between income and expenditure, thus shaking the maintenance and development of the whole system.

Second, the complete accumulation type.

This financial management model is more suitable for pension insurance plan, housing provident fund plan, education investment plan and so on. It is required to raise funds under the guidance of the principle of long-term vertical balance of payments. This financing model is characterized by savings accumulation, that is, the current financing is for future use, and funds are precipitated to form funds.

The advantages of complete accumulation are:

On the basis of scientific prediction, accumulating funds through appropriate charging rates can solve the rising pressure of social insurance payment caused by socio-economic risks and accidents; Because there is no transfer payment between different groups, many contradictions and conflicts caused by this are avoided; The accumulated funds can promote the development of capital market and economy through reasonable investment; Personal accounts are used for fund accumulation, which enhances the social insurance awareness of the insured subjects and avoids the phenomenon of evading payment.

The disadvantages of complete accumulation type are:

The huge amount of provident fund is under great pressure to maintain and increase its value; Affected by inflation factors such as wage and price changes, the accumulated funds are at great risk of depreciation; The self-help mode of personal account lacks social mutual assistance and the redistribution function is weakened; It is difficult to change from pay-as-you-go system to fund accumulation system, and the initial payment burden is too heavy; It requires a highly developed and standardized financial market, which is difficult for many developing countries to achieve.

Third, the partial accumulation model.

This is a financing model that combines the short-term horizontal balance principle with the long-term vertical balance principle, and is also suitable for social security plans such as endowment insurance. This financing model is characterized by the coexistence of transfer payment between different subjects and deferred payment of their respective incomes.

Advantages of partial accumulation:

Its advantages are that the raised funds not only provide protection for the beneficiaries in the original system, but also accumulate future protection funds for the insured in the new system; Compared with the fund-free accumulation of pay-as-you-go system, the partial accumulation system has accumulated funds, which is conducive to promoting the development of capital market and economy; Compared with the huge provident fund with a complete accumulation system, some provident funds have a slow growth rate and a small amount, and the investment risk and depreciation pressure of the fund are relatively small.

The disadvantages of partial accumulation are:

Due to the alternate transition between the old and new systems, employees have to bear the double burden of paying for the current security benefits of the beneficiaries of the original system and raising funds for their future security benefits, and enterprises and employees are under great pressure to pay.

Extended data:

China's social insurance fund-raising method implements partial accumulation system, that is, the combination of pay-as-you-go system and complete accumulation system. According to the relevant regulations, China's social insurance funds are raised by local tax authorities or social insurance agencies in the form of social insurance premiums, which puts forward clear requirements for different account setting and management when raising funds under different collection forms.

It mainly includes two accounts: income household and financial special account. The former is managed by organs, while the latter is managed by local financial departments. In areas where social insurance premiums are collected by agencies, the agencies shall set up temporary payment income of income households, units and individuals and the resulting interest income, and transfer them to financial accounts on a regular or fixed basis; In areas where the tax authorities collect social insurance premiums, there are no income households, and the payment income is directly deposited in the financial special account.

As far as financing is concerned, the main purpose of the financial special account is to accept the social insurance premium income collected by the tax authorities or social insurance agencies and the financial subsidy income allocated by the financial department.

In most areas of our country, the social security mode of combining social pooling with individual accounts has been implemented, and the social pooling has implemented the pay-as-you-go system to pay the pensions of retired elderly people. However, because these people have no personal accumulation, the social pooling fund is making up for this gap. With the aging of the population becoming more and more serious, this part of the gap is getting bigger and bigger, and the social pooling fund can't make ends meet, which encroaches on the funds of personal accounts and makes the personal accounts run empty and bear a heavy burden.

Baidu encyclopedia-social insurance fund

Baidu Encyclopedia-National Social Security Fund