Core Points - The new social security regulation, effective from September 1, mandates that any agreement to not pay social security is invalid, indicating a shift towards compulsory social security contributions [3][4][7] - The policy reflects a growing concern about the sustainability of social security in the face of demographic changes, particularly an aging population [5][15][32] Group 1: Social Security Changes - The new regulation emphasizes that not paying social security is no longer an option, addressing the existing gray areas where many individuals and small businesses previously avoided contributions [9][10] - The essence of social security is to balance short-term and long-term benefits, ensuring individuals contribute a portion of their income for future security [10][11] Group 2: Financial Implications - In Shanghai, for a gross salary of 10,000 yuan, the employee receives 8,152.5 yuan after deductions for social security and taxes, while the total cost to the employer is 13,270 yuan [12][14] - The financial burden of social security contributions is expected to increase for both employers and employees as the demographic structure shifts, leading to higher costs in the future [32] Group 3: Demographic Challenges - The aging population is creating pressure on the social security system, with the old-age dependency ratio projected to rise significantly in the coming years [21][23] - The current social security model relies on the working population to support retirees, but the decreasing ratio of workers to retirees poses a challenge for sustainability [19][20][22] Group 4: Global Perspectives on Pension Systems - The global pension landscape features two main models: the pay-as-you-go system and the funded accumulation system, with China's system combining elements of both [26][28] - Countries worldwide are exploring various pension models to address the challenges posed by aging populations and declining birth rates, indicating a trend towards reform [29][30]

Core Viewpoint - The new social security regulation, effective from September 1, mandates that any agreement to not pay social security is invalid, indicating a shift towards compulsory social security for all [6][8]. Summary by Sections Social Security Changes - The recent social security regulation emphasizes that not paying social security is no longer an option, reflecting a potential beginning of mandatory social security for everyone [6][8]. Understanding Social Security - Social security serves to balance short-term and long-term interests, where individuals must sacrifice part of their current income for future benefits [9][18]. - The calculation of social security contributions reveals that when a company pays 13,270 yuan, the employee only receives 8,152.5 yuan after deductions [10][13]. Demographic Challenges - The changing population structure is putting pressure on the social security system, with an increasing elderly population and a decreasing working-age population [14][17]. - The old-age dependency ratio in China is projected to rise, with 22.8% of the working population supporting 20% of the elderly by 2024 [19]. Pension Models - Global pension systems are primarily divided into "pay-as-you-go" and "fund accumulation" models, each with its advantages and disadvantages [20][22]. - The current pension system in China combines elements of both models, but it still faces challenges due to demographic shifts [22][23]. Societal Implications - The necessity for social security arises from the potential consequences of widespread poverty among the elderly, which could lead to social instability [23][25]. - The implications of mandatory social security will affect businesses and employees alike, potentially increasing labor costs and impacting competitiveness [25].