Abstract
The Employees’ Basic Pension Insurance (EBPI) scheme is a major social insurance project for employees in China. The booking interest rate (BIR) of the individual accounts in the EBPI scheme set up by the Ministry of Human Resources and Social Security since 2016 was approximately 8%, much higher than the real rate of return (RRR), thereby causing a large interest rate difference loss (IRDL). This study calculated the natural gap, IRDL, and total fund gap of the individual accounts of typical male and female EBPI members using an actuarial model. The results showed that the present values of the fund gap of the individual accounts in 2016 are 768,660 yuan for males and 666,940 yuan for females, under 8% BIR and 3% RRR. Owing to the high BIR, the booking individual account balance of EBPI members who retire before completing 59 years would continue to increase even after retirement benefit payments.
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