The Analysis Of The Constrains By The Pension System For Chinese Pensions To Enter Capital Markets

The thesis is to study the restrictions in the social pension system that are unfavorable not only for social security to function, but also to promote the capital market to develop, from the view point of how to make the social pension funds facilitate capital market to develop.I tried my best to follow the latest achievements in the world and to use them in doing my research. These achievements did help me a lot in the research. After researching religiously I built up my own position in some particular areas. Moreover, I made the normative analysis and the illustrational analysis in my research, so my thesis is quite convictive. However, there are still some areas I need to continue my study because the study of social pension system is related to many other areas, such as economics, sociology, demography and statistics. Structure of the thesis:In the first chapter I discuss the role of the old age insurance funds playing in the economic system. This kind of funds transforms the booming civic bank savings into the long-term investment, and supports and promotes the development of capital market and security funds. Improving social pension system is the key point to resolve these systematic restrictions.In the second chapter I introduce the experience of privatizing the management of social pensions in foreign countries. Their experience would be very helpful in resolve the problems in our social pension system.In the third chapter I analyze the current situation of the social pension system in China and explain that the system can neither work as social security nor is suitable to invest pension funds in capital market. I also analyze the reasons why these systematic problems form, demonstrate why it is feasible to resolve these problems, and make my suggestions. My points and conclusion:1. The surge of personal bank savings should benefit economic development, however, the savings have negative effect on the economic development because the percentage of transferring the savings into investment is low. Meanwhile, our capital market seriously lack of institutional investors and the long-term capital. These factors have become the bottleneck to develop our capital market and I think that a healthy system to invest social pension funds into capital market would resolve all the problemsmentioned above.2. The experience in foreign countries shows that the more the funds model is adopted and the pension programs are managed by private sectors, the better the pension and capital market develop, and that the more the pay-as-you-go mode is adopted and the pension programs are managed by government, the worse the pension and capital market develop.3. The core of the socially raised funds with individual account funds in term of management is the pension system that combines the pay-as-you-go model, the blankness of individual pension accounts and pension funds managed by government. Such kind of system neither can accumulate a large mount of money, nor is qualified to invest directly into capital market.4 The blankness of individual pension accounts is the core reason to make our current system pay-as-you-go.5. According to current situation and the main trend of Aaron Conditions, δ + ρ < r, I conclude that the funds model should be the best solution to our social pension system.6. The firm annuity, as the second mainstay of the social pension system, is a kind of funds pension. It is also an important part of pension funds invested into capital market and is important to privatize the pension management. The reason why the complementary firm pension is just at the beginning stage is that there is no enough space for it to develop and no necessary compulsive regulation.7. The pension system is not unified in each part of China, and the social insurance coverage is incredibly low. 8. The small investment scale and the low return on investment of our social security funds is the unavoidable result of social investment,...