A Study Of The Institution Reform Of Township Employees' Pension In China

One of the serious obstacles in China's economic reform is the lack of an efficient and sustainable pension system. Risk is a very important issue in all the discussions of pension. This dissertation classified the risk of pension system into endogenous risk exogenous risk While the endogenous risk and the exogenous risk of Pay-as-you-go and Funding are different. This dissertation analyzed the mechanism for the creation of these two kinds of risks. In the Pay-as-you-go system, exogenous risk mingled with endogenous risk, but in the Funding system, exogenous risk is independent from endogenous risk and the exogenous risk could be averse through institution design. Apart from this, Pay-as-you-go is weaker than Funding in finance. If we consider the quick development of capital market, the merit of the Funding system is more obvious. After analyzing the problems emerged in China's pension reform, this dissertation has put forward a Funding system that is appropriate for China. In addition, this dissertation has discussed the financial planning on the transaction cost and the fund management institution.