Pension Systems and Reforms in China and Russia

This paper discusses pension system reforms in China and Russia. Before the reforms, both countries had pay-as-you-go pension systems, with limited coverage, inequality across sectors, lack of portability, and unsustainable financing. Pension reforms, begun in China in 1984 and Russia in 1997, aimed to establish a three-pillar system: (1) defined benefits, (2) mandatory funding, and (3) supplementary pension. The reforms have expanded coverage, increased portability, reduced inequity, and improved labor mobility of pensions. However, the two countries face many challenges, including aging populations, a double burden on active workers, and immature capital markets.