Study On Choosing Chinese Pension System And Maintaining Chinese Pension Funds' Safety

Everyone has the right to social security, including pensions. A good pension system isnot only a symbol of civilization of a state but also a process to improve socialharmoniousness, economic development and political stabilization. This opinion iscorrectly especially in developing China today.China has established a three pillars pension system for years. However, it is believedby some people that this new pension system has more problems than achievements, so thefirst part of this dissertation develops a systematic research on designing and reformingChinese pension system. A tendency of transition to a partial funded pension system ismentioned in this paper after historical research on many pension systems in other countries.This study compares the two basic types of pension systems: pay-as-you-go (PAYG) systemand fully funded (FF) system then explains their effects on economic development, socialwelfare and the judgement of value. Although there have many differences between them,we should not omit their correlation and exaggerate their benefit to economy. Afterempirically investigating to the reforms in china and analyzing the causes of manyproblems, these papers draws on some policy suggestion to Chinese government andpresent a model to split appropriate proportion between individual account and the socialreserve account in Chinese pension system.The second part of this dissertation develops a security framework for pension fundoperating. It consists of five macro-mechanisms including management, supervision,deputization, insurance and alarming system. A risk-alarming model for pension fundoperating is specifying with an index system and a multilevel unascertained measurementmethod. This paper investigates the relationship between pension fund and the capitalmarket for forecasting that pension fund is entering the capital market inevitably. In order toimprove pension fund operating performance, this study introduces lot of portfolio tools,strategies, methods those applying succefully for the pension fund investment in manycountries, then develops some suggestions and operating methods to decision-makers,including a multistage mixed-integer stochastic programming ALM model that is designedto maintain Chinese pension fund operating safety.This study will serve for present pension system reform in china practically. It canprovide some ideas for policy-makers to design pension system and ensure pension fund'ssafety.