Abstract: It is 20 years after China made a drastic pension reform based on the 1994 World Bank (WB) report. China has been facing the problems similar to many other countries which have introduced the similar model and reversed. This paper reflects on the core proposals of the 1994 WB report in perspective of both economic theory and experiences all over the world for the past 20 years. The review may help China restructure her pension scheme to ensure more adequate and sustainable benefits. The paper discussed: the roles of funded pensions in withstanding population aging and promoting output growth, intergenerational equity, income share of public pension benefits and their progressivity, and the match between policy instrument and its objective. The analysis concluded that the 1994 WB report was not based on robust scientific evidences. Therefore, no developed country has followed the 1994 WB report to reform their pensions. Instead, they adopted automatic balance mechanism to get the financial problem settled down. This paper suggested China to introduce the notional defined contribution model.

Key words: public pensions, pay-as-you-go, mandatory funded pensions, automatic balance mechanism

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（Takayama, N. Prof. Dr. Professor Emeritus at Hitotsubashi University，Distinguished Scholar at RIPPA, Japan）