Study on Building Determining Mechanism of Retirement Age Based on Self Dependency Coefficient

It is important to study determining mechanism of retirement age. Retirement age,which too high or too low will impact the sustainable and sound development of old age insurance,is an age of a labourer quit labour force market and receive old age pension. Though retirement age determined by a lot of factors,the key factor should be the correlation between contribution period and payment period,which is self dependency coefficient. Adjusting retirement age is a very sensitive topic,if the adjustment is not reasonable,that will lead to social instability and social loss. We should base on self dependency coefficient and build up scientific,normal and self-adjusting determining mechanism of retirement age.Retirement age is quite difference between various countries in the world. According to the data from 165 countries or regions,highest retirement age is 67 years old,and lowest retirement age is 50 years old,meanwhile man's retirement age is higher than women's. According to current polices in China,man's retirement age is 60 years old, women cadres' retirement age is 55 years old,workwoman's retirement age is 50 years old. The factors impacting retirement age is mainly include capacity of labourer,balance of fund,and governing ideas. The immediate cause impacting retirement age is labour capacity; reasonable range of retirement age should be a range of age in which sufficient labour capacity cannot be provided. Retirement age is related to fund balance closely; reasonable range of retirement age should be a range of age in which balance of old age insurance fund could be realized basically. Retirement age is regulated legally; that adopting higher retirement age or lower retirement age is related to governing ideas such as people oriented,moderate labour,and full employment. Self dependency coefficient,which reflecting that payment period burden by per contribution period,has a profound theoretical connotation. Formulization as follow: self dependency coefficient = payment period / contribution period =( expectation of life- retirement age) /( retirement age-working age). It is a positive correlation between contribution period and retirement age,that is,higher retirement age is and longer contribution period will be. It is negative correlation between payment period and retirement age,that is,higher retirement age is and shorter payment period will be. Self dependency coefficient should have a proper range theoretically. Where working age and age at death is given,the basic problem studied is that how can determine a proper retirement age,meanwhile pension benefits could be protected and balance of fund could be achieved. To answer that question,needing theory and practice integrate closely,and according to Gaussian distribution of data from various countries in the world,and working out the parameter range of self dependency coefficient that guiding the adjustment of retirement age. Computed results as follows: the range of self dependency coefficient guiding adjustment of man's retirement age is [0. 24- 0. 12,0. 24 + 0. 12]= [0. 12,0. 36]; the range of self dependency coefficient guiding adjustment of woman's retirement age is [0. 45-0. 14,0. 45 +0. 14]= [0. 31,0. 59]. That determining the proper range of retirement age according to the proper range of self dependency coefficient. The highest retirement age and lowest retirement age could be work out. The formula as follows: P express self dependency coefficient,M express expectation of life,N express working age,X express retirement age,from p =( m- x) /( x- n),to x =( m + pn) /( p + 1). That building the automatic adjustment mechanism to retirement age according to proper range of retirement age. Retirement age need not adjust when actual retirement age fall over between the highest retirement age and lowest retirement age. Retirement age need enhance when actual retirement age lower than the lowest retirement age. Retirement age need reduce when actual retirement age higher than the highest retirement age. Since then,automatic adjustment mechanism to retirement age has been built. The proposal to adjust retirement age has been pointed out in China according to the principle of self dependency coefficient. The lowest retirement age has been calculated with 5 years cycle from 2010 to 2060 in China,and some proposal to adjust retirement age for next 50 years has been put forward. For example,man's retirement age will be adjusted to 65 years old and woman's retirement age will be adjusted to 60 years old. On this basis,retirement age will be adjusted dynamically so that retirement age and self dependency coefficient at a reasonable range all along.