Abstract: China’s three-pillar old-age insurance system has played an important role in improving the reform of state-owned enterprises and protecting the basic living standard of the retirees. However, it has encountered many unexpected problems in the actual operation. These problems make it impossible to bring a good demonstration effect to the upcoming old-age insurance reform of the government organizations and institutions. In addition, they have intensified the social stratification and brought lots of new social risks to the future society. To change the three-pillar mode into the binary-level old-age insurance system composed of the basic old-age pension and the pension fund can be the effective solution to overcome the defects of the existing old-age insurance system.

Key words: old-age insurance; system fragmentation; the binary-level system