Analysis on the sustainability of China´s basic pension fund

Based on the actuarial methods and calculating models for pension, this paper analyzes the sustainability of China´s basic pension fund under two macroeconomic scenarios. The result indicates that under first scenario, implicit pension debt will run to the top range in 2035, and the funded ratio keeps decreasing from 2039, together with the deficit expanding, and China´s present basic pension system faces insolvency crisis. Little difference exists in optimistic expectation. Fiscal expenditure to fill up this gap is the significant guarantee, especially when the basic replacement rate is fixed. Therefore, the benefit level and retiring age should be accordingly adjusted at proper time. Furthermore, efficiently operating pension fund, establishing a multilevel protection system are the effective measures to achieve the sustainable development of China´s pension system.