Comparison of the Pension System Reform in East Asia and Southeast Asia〔*〕

Yang Yifan，Chen Keyu

(Faculty of Public Administration Southwest Jiaotong University，Chengdu Sichuan 610031)

Ⅰ．Introduction

There are many types of division of pension system in the world．Profound results have been gained from the researches on European countries where welfare system originates．Scholars with the representative of Gough(2001)think that the characteristics of the welfare systems of Asian countries are fundamentally different from those of European countries because social polices of Asian countries，including pension system，often falls into the realm of economic policy or“social economic policy”whose fundamental guide is to accelerate financial liquidity，improve human resource，boost mar-ket competition in order to stimulate economic growth．According to the research，this can be attributed to the following reasons:first，colonial experiences have exerted great influence over the systems of these countries，such as the influence of Japan on Korea and Taiwan，China;second，there is“chasing expectation”in economic growth．Both the four Asian dragons and other“Asian emerging economies”have the orientation of“giving economic growth priority”in the development mode，which is the fundamental element of establishing“productive welfare country”;third，central governments of A-sian countries tend to have poor regulative ability in social field，and the tradition of family and Confucian culture is deeply rooted in Asia，which motivates central governments to rely on the concept of“family”“unit”and “group”to collect fund for the elderly service，unlike European countries which rely on the powerful intervention of countries in the individual field．(Ramesh and Asher 2000;Aspalter，2006;Kwon，2005a，2005b;Lee and Ku，2007)．Due to the fact that there are various and changeable welfare systems in various countries，it is difficult to make accurate classification according to single dimension．(Esping － Andersen，1990;Ferrera，1993;Bonoli，2003;Marier，2002;Hinrichs，2001;Ellison，2003)

This paper tries to interpret the phenomenon that the reforms of pension systems of Korea，Japan，Singapore，Malaysia，China and Vietnam are different from western industrialized countries and pay attention to the reform divergence and various policy choices of these countries by comparing the existent welfare systems and inspecting the social security facts of these countries since the late period of the 20th century．

Ⅱ．Analysis and observation

According to the analysis structure of Ku ＆Finer(2007)，we can analyze social welfare from three levels:welfare system，welfare regime and welfare policy，which are closely related yet have essential differences．

1．Differences of the pension systems of Asian countries

(1)Social insurance:Japan and Korea

The economic system of Japan and Korea pays attention to industry and export．Therefore，both countries adopt social insurance system which charges fee．Japan and Korea，based on income － related social endowment insurance，raise fund for insurance by the payment of both employers and employees．In Korea，all employees and employers must attend the second layer of national annuity plan，and meanwhile，people in special career，such as civil servants，enjoy the DB pension plan．

Similarly，the second layer of Japan consists of three parts．Employee pension covers all workers．Mutual pension gives solid benefit to special employees，such as those who work for the government．Besides，the third layer of Japan is made up of several independent plans，covering some part of employees of private sector，such as retirement assistance．

(2)Public accumulation funds:Singapore and Malaysia

There is single pension system based on central public accumulation funds in Singapore and Malaysia．The pension insurance system of Singapore mainly relies on one pillar:central public pension，which provides the majority of social security function．Besides，there are pension plans where some civil servants are not required to pay the fee and can gain the fund at any time，which are called government retirement pension plan．There are also saving and employee plans for some type of armed forces personnel．Central pension is not a simple social security plan，and it is one of the tools of social economic and political policy－making and plans．

Similar to Singapore，the endowment insurance system of Malaysia applies to workers of public and private sectors，and there is no unified organization．First，public accumulation funds provide housing and medical security for private employees．In Malaysia，the major route of gaining endowment insurance for private employees is to become the member of EPF．Second，there is a pension plan for civil servants of fixed amount which is fully－funded by government．Third，welfare department has the responsibility to relief poverty．

(3)Mixed type:China and Vietnam

There is a multi－level basic pension system since 1993 when China began the reform of pension system．At present，China’s basic endowment insurance system consists of four routes:township workers old－age insurance，the endowment insurance of the institutions，rural endowment insurance for urban residents and old －age insurance for government functionary．Civil servants are not required to pay the fee;besides，China has introduced enterprise annuity and voluntary personal pension plan．

The social insurance system of Vietnam consists of compulsory type and voluntary type．The voluntary endowment insurance system has been taken into effect since 2008 with the target of people with informal work or farmers．However，compared to compulsory endowment insurance，voluntary endowment insurance has no short－ term benefit，does not guarantee the minimum pension and has no possibility of early retirement．

It needs to be pointed out that the risk of China’s endowment insurance does not lie in the lack of fund，but scattered system design and poor coordination．First，the unified social security system severely weakens the flow of labor，especially for farmers．Second，the scattered management of local social insurance has given rise to focused investment，which makes it difficult to establish a diversified investment system．Third，there is great difference in various parts of China．

2．Aim and action

(1)Safeguard financial stability．How to safeguard and strengthen the financial stability of social safeguard projects is the top puzzle of institutional reform and development．Since the 1970s，Japanese and Korean governments have been forced to lower the insurance benefit and raise the insurance payment．Chinese government has also greatly improved the investment into endowment insurance，but encountered many difficulties．

(2)Boost economic competition．Several economic crisis in Asia show that sustainable economic growth not only leverages the virtual economy，but also benefits sound real economy．The premise of the stable function of non －free social insurance is the stability of real economy．Otherwise，in case of slow economic growth and high unemployment，compulsory social insurance，as one of the major parts of enterprises labor cost，will inevitably have negative influence on enterprises vitalization，thus impairing economic growth．

(3)Realize social justice．Justice is the core principle that needs to be carefully handled by any social security project．However，“justice and injustice of pension system”has different meaning and forms in various countries．Diversified reform problems have arisen due to the interests of various Asian countries．The national integration of original scattered pension system，the introduction of adjustment funds，and the indexation adjustment of pension treatment during recent years can all be considered as the efforts made to improve social justice．

(4)Improve the efficiency of operation．The improvement of the efficiency of operation is difficult for the developing Asian countries．Financial stability has been improved when the financial support of public endowment insurance has been weakened．However，more and more social groups have been exposed in the social risk of global completion，economic fluctuation and population aging．We must broaden financial channel and reform tax system in order to provide decent economic safeguard for all the citizens．At the same time，the government has to strive to elevate the flexibility of pension system and reduce the management cost of system brought by labor flow in the face of diversified labor market．

Ⅲ．Conclusion

One of the features of civilization system or modern countries is to ensure“aging decently”．Individuals who quit labor cannot defend natural hazard，and they need the help of national system．However，the solving methods of each country vary greatly．In terms of policies，there are three possible choices to provide pension for the aged of Asia．Frist，broadening the coverage of standard social security;second，promoting small－ size insurance featuring mutual assistance;third，adopting more radical social aid，such as social pension．The former two need the payment of the insured，while the third one is a comprehensively prevalent policy which incorporates everyone into the public pension system．Despite that non－free social security has its advantages，international experiences show that it is not successful in developing countries in terms of broadening its coverage in rural areas，where peo-ple of low income cannot afford it．Therefore，it is difficult to secure pension and realize total coverage by non－free social security among people of low income in Asian developing countries．It will harm their basic right if it is compulsory that people of low income should pay for their pension．More and more scholars in international organizations and social security research think that the former two methods are not suitable for people under the poverty line，and that social pension system is more practical．

Asian pension systems discussed in the article all face severe and urgent reforms at present and in the future．Policy －makers of all countries need to inspect and compare the above－mentioned pension reform plans carefully so as to realize the overall reform and development goal．Generally speaking，despite that there are many differences in the level of system and policies，there is no change in the nature of the productive welfare regime of Asian countries．As long as economic growth remains the top task for Asian countries，social security system，such as pension system，will feature dependence compared with other economic systems．Therefore，we suggest that the basic point of analyzing the reform of Asian pension system should not only be in the political level，but also pay attention to the dependence．We should understand the inner motivation of the reform and development of Asian countries from the mid－term institutional aspect and long－term administrative system so as to adopt effective and continuous reform and development strategies．

Notes:

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