Study on the impact of delaying the legal retirement age on basic endowment insurance for urban employees in China

Abstract The 14th Five-Year Plan for 2021 has once again put delaying the legal retirement age on the agenda, and the impact of delaying the legal retirement age on the basic endowment insurance for urban employees has received much attention. By building an actuarial model of individual basic endowment insurance fund contributions and benefits, this study examines the effects of raising the retirement age and life expectancy on urban employees' pension contributions and benefits.Delaying retirement has been shown to reduce the gap between pension contributions and benefits for female employees, but it still demonstrates that benefits outweigh contributions;When the current pension policy and the guidelines outlined in this paper are used, the difference between pension contributions and benefits is positive for male employees who retire at age 64 with 42 years of contributions or at age 65 with 37 years of contributions;but the difference between pension contributions and benefits for male employees is much smaller than that for female employees. The difference between male's and female's pensions contributions is much smaller than that between male's and female's pensions, and the difference between male's and female's pensions cannot be realized.The increase in life expectancy means an increase in the number of lives left in retirement, which leads to an increase in pension benefits, and the difference between pension contributions and benefits will become more pronounced;delaying the legal retirement age can help reduce the difference between contributions and benefits under the increase of life expectancy.