1, pay-as-you-go system. This is a fund-raising method with horizontal balance as the guiding principle, which is implemented according to the prescribed income model, and social security institutions carry out social fund-raising according to the required insurance amount.
Pay-as-you-go system means that all the payment income in the current period is used to pay the social insurance expenses in the current period, leaving no or only a small amount of reserve funds. This method embodies the adjustment function of social insurance mutual aid, is simple and easy to operate, and can also avoid the danger of fund depreciation after price increases. However, because it is only based on the actual balance of payments, this model not only lacks long-term planning for the rights and obligations of the insured, but also has poor adjustment ability in time and space. Moreover, when the insurance cost is increasing year by year and the proportion of withdrawal is rising, it may also lead to the difficulty of overburdening employees, enterprises and the state.
2. A complete accumulation system. This social security fund raising model is based on the principle of long-term vertical balance. Its essence is the intra-generational redistribution system in individual life. Generally speaking, workers need to pay insurance premiums regularly by both employers and employees or only one of them according to a certain proportion of the total wages, and record them as long-term accumulated funds in personal accounts, and the ownership belongs to individuals. Eligible, one-time or monthly.
The complete accumulation system means that all the current payment income is used to establish a reserve for the insured who pays the current payment, and the goal of establishing a reserve should be to meet the financial needs of paying insurance benefits to all the insured in the future. This model requires workers to raise social insurance funds through savings accumulation during the whole employment or insurance period. This way embodies the reserve function of social insurance and makes social insurance have a relatively stable economic guarantee. However, due to the long time span, the reserve fund is easily affected by inflation, and the pressure of maintaining and increasing the value of the fund is very great.
3. Partial accumulation system. This is a combination of pay-as-you-go system and complete accumulation system, and it is a financing model that is compatible with the principles of horizontal balance and long-term vertical balance. Part of the guarantee fee is paid as you go to meet the current demand, and the other part is accumulated to meet the growth of future payment demand. This financing mode is the synthesis and innovation of the original two modes.
The partial fund system, also known as the partial accumulation system, is a financing model between the pay-as-you-go system and the whole fund system. Part of the immediate payment is used to meet the current social insurance expenses, and part is used to establish a reserve fund for the insured. The partial fund system is a more flexible model for establishing social insurance funds, which combines the advantages of the above two financing models.
Legal basis:
People's Republic of China (PRC) social insurance law
Article 12 The employing unit shall pay the basic old-age insurance premium according to the proportion of the total wages of employees stipulated by the state and record it in the basic old-age insurance pooling fund.
Employees shall pay the basic old-age insurance premium in accordance with the proportion of wages stipulated by the state and record it in their personal accounts.
Individual industrial and commercial households without employees, part-time employees who have not participated in the basic old-age insurance in the employer and other flexible employees who have participated in the basic old-age insurance shall pay the basic old-age insurance premium in accordance with state regulations and record it in the basic old-age insurance pooling fund and individual account respectively.