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Pension Finance And Accounting Issues

Posted on:2002-03-29Degree:DoctorType:Dissertation
Country:ChinaCandidate:X Y WuFull Text:PDF
GTID:1116360062975212Subject:Accounting
Abstract/Summary:PDF Full Text Request
Through studying pension finance theories and pension accounting theories, this study seeks to achieve equilibrium of pension finance system, appropriate pension funding, effective pension investment, efficient pension management, and proper pension accounting and reporting.The paper adopts normative method, complemented with experimental positive method, achieving logical induction and deduction supported with convincing real cases. It establishes finance and accounting theories on the basis of fundamental pension theory concepts and China Pension System background. There are eight chapters.Chapter 1 IntroductionThis chapter discusses the origin of pension system and its development in the world first. It provides theoretical explanation on why pension system develops from individual family decision to social system. The main models of pension system and the large-scale reformation movements in the world are then demonstrated. Second, the paper discusses the history of China pension system reformation and its three-level composition. It points out the following problems in place, the required contribution is quite high, the effective pay roll is very low, the pension financial system could not equilibrated, the pension fund loses the accrual ability and the management is bad. Third, it displays the update research information on pension system in the world and what this paper would do. The clues of the whole paper could be seen clearly here. Last, in order to facilitate the writing, the paper demonstrates several basic concepts related with the issues on pension finance and accounting. It clearly analyses the relation and comparison of the two couple basic concepts, one is the defined contribution pension plan and the defined benefit pension plan, and the other is pay-as-you-go system and fully funded system. It also displays the Franco Mordigliani Life-cycle Theory and the Over Lapping Generation Theory, which are the basic theory of the pension financing models. Former Section Issues on Financial Pension TheoriesThis section discusses the following financial issues,Chapter 2 Financial Equilibrium of Pension SystemFinancial equilibrium of pension system analyzes and infers equilibrium formula of financial pension systems respectively under pay-as-you-go system and full-funded system. It concludes that the main factors affecting financial equilibrium of pension system are the contributionable salary sum, the age of retirement, and the benefit level and investment returns. It also discusses how these factors affect financial equilibrium and how to achieve equilibrium of pension system.Chapter 3 Choosing the Pension Financing ModelsThe issue of choosing pension finances model. By reviewing the world's history of pension financing model, the article answers why official pension systems first adopted pay-as-you-go system and then transformed to full-funded system. The writer believes that current reforms will tend to adopt full-funded system. Individual accounts are inevitable with full-funded system. Accompanying risks of transfer must be anticipated and prevented.Practically in China, in my opinion, the basic pension system should adopt partial-funded system, while the supplementary industrial pension system should, theoretically, adopt full-funded system.The last part of this chapter analyzes formation of transfer cost, applicable methods of payment and its possible payer, pointing out that it is impossible to retreat without damage to the welfare of certain generation once pay-as-you-go system is in place. The transformation from pay-as-you-go system to full-funded system will inevitably result in transfer cost, the so-called financed gap. The only party capable of reimbursing such hidden pension debit will be the government.Chapter 4 the Investment of Pension FundThe most important financial decision is the proper investment and management of pension funds. The return from pension investment in capital market is the only way to gain on pension funds. This sect...
Keywords/Search Tags:Pension System, Pension Plan, Pension Cost, Pension Liability, Pension Fund, Pension Plan Asset.
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