Study on the replacement rate of the three-pillar pension insurance for employees

With the rollout of the personal pension scheme, China has formally established a three-pillar pension system. To evaluate its adequacy, this study develops a replacement-rate model covering all three pillars and conducts simulations based on CFPS 2022 data. The results reveal pronounced stratification in benefit adequacy, with persistent coverage gaps for certain groups. The system exhibits structural imbalance: the first pillar bears most of the responsibility, while the second and third pillars provide limited supplementary support. Replacement rates are highly sensitive to institutional parameters such as contribution years and retirement age. Although the personal pension scheme marginally improves overall replacement rates, its impact remains modest. Policy recommendations include gradually adjusting the statutory retirement age, optimizing contribution-year requirements, promoting the development of enterprise annuities and personal pensions, and strengthening coordination across pillars to enhance overall system sustainability and adequacy.