Research On Legal Issue In Trusted Operation Of Pension Fund

Endowment insurance system is not only the core and important component of the entire social security system , but also the most basic and representative system of that. The old-age insurance system mainly focuses on pension fund raising, operating and the distributing. It can be said that the pension fund is the cornerstone of the endowment insurance system. Pension fund system, as a modern security system implemented universally, plays an important role in protecting basic human rights such as the right to life of the broad masses of the retired and maintaining the harmony, stability, and development of our society. The endowment insurance system has experienced a long and tortuous process of reform and development since the 1980s. But now we has set up a basic frame that the state's basic old-age insurance, enterprises'supplementary pension insurance and personal savings endowment insurance serve as the main pillar of the old-age insurance. And the revenue and expenditure of the pension fund have reached a considerable scale. However, old-age insurance system is neither sound nor regular. Particularly, the pension fund management and operation model is out of date, and the operating channel is lack of variety, which makes preserving and increasing the value of the pension fund extremely grim. With the elderly population increasing and the demand of endowment insurance pavement growing, whether the pension fund can be regulated and effectively operated not only relates to the outcome of more than 20 years of reform of the endowment insurance system, but also relates to the fate of the entire system.In this regard, we should learn from the experience of foreign countries, and explore the ways of making use of the capital market to improve its operational efficiency so as to preserve and increase the value of pension funds. Pension fund participating involving in the capital market is necessary for both preserving and increasing value of the pension funds and the mature capital market with fully development. In all the management and operation methods, the trust is the best choice for the pension funds entering the capital market. At the same time, creating a rational and efficient legal relationship of trust operation and a reasonable and proper supervision system helps to realize our goal of preserving and increasing the value of pension funds.This paper consists of four parts.Part I describes the present situation and the existing problems in operation of pension funds. In this part, the profile of our current old-age insurance system development is discussed. The existing pension insurance system consists of three parts, which are the state's basic old-age insurance, enterprises supplementary pension insurance and personal saving endowment insurance. Problems such as the grim situation of revenue and expenditure, the relevant departments often misappropriating pension funds, and the few investment channels and operating inefficiencies are pointed out. Pension fund managing and operating in the four typical states-Chile, the United Kingdom, Germany and France are introduced. Only the pension funds take part in the market-oriented management and investment diversification, can achieve the purpose of preserving and increasing the value.Part II describes the trusted trust operation mode of pension fund. This part starts exposition from the necessity and feasibility of the trust operation of pension fund. The first section analyzes the necessity of the trust operations. We choose the accumulation of pension funds system. To ensure to maintain and increase the value of the pension fund, the pension funds should enter the capital market, make diversified investment and improve its rate of returning of investments. So that we can overcome the devaluation of funds caused by inflation. Pension fund entering the capital market is an inevitable requirement for the development of capital market. Pension fund as a long-term and stable financial resources, can promote the prosperity and development of the capital market. It can optimize the structure of main investment subject help to increase rational investment elements, promote the harmonious and stable function of capital market, and the innovative financial products. Then through analyzing pension fund management and operation ways in theory , the conclusion is achieved that the trust is the best way for pension fund entering the capital market. Through entering the capital market, pension funds can change the inadequacy of trust funds, thereby bringing trust industry's prosperity out. The second section is the feasibility of trust operation of the pension fund. Trust operation for pension fund has a theoretical and realistic basis. Trust is carefully cultivated by British equity. Its establishment is in the process of following the law of the United Kingdom to overcome the rigidity and flaw of the common law . In the modern market economy, the main function of the trust system is embodied in the following aspects: Firstly, the transfer of property and active professional management; Secondly, the continuity of management; Thirdly, the security of management. At the same time, the trust system is completely the same fit for the special requirements of pension funds .The independence of the trust property guarantees the independence of pension funds, the continuity operation management guarantees the stability of the pension funds, and trust professional financial management of the pension funds guarantees the increasing of value. In addition, the establishment of the trust system, the development of the trust in the reform of the social security fund system management and the external macroeconomic environment are the practical basis to realize trusted operation.Part III describes the legal relationship in trust operation of pension fund. Enterprise annuity pension fund scheme is the most active and promising part among the whole pension plan. Since the enterprise annuity pension fund scheme contains comprehensive legal relationship, this section treats it mainly. First, the legal relationship of pension funds models of Singapore, Chile and the Anglo-American are introduced. China should Governing Council of pension fund as Britain and the United States. So the council system can adapted with our current system. Then, the rights and obligations of the pension fund managers are stated. Pension fund managers has the rights to operate the fund as well as to ask for commission, to request the compensation and damage paid. The obligations of due care and faith are specially dealt with. Due care obligation demands managers rely on their professional skills to treat the management as their own affairs. Faith obligation prohibits the managers from profiting a third person apart from the beneficiaries of the Trust and the managers themselves.Part IV describes the legal supervision for trust operation of pension fund. First of all, the foreign regulatory regimes and patterns are elaborated. For investment supervision of pension fund, there are two operating modes: one is "prudent person" rule; the other is the "quantitative portfolio regulation" rule. Secondly, China's current regulatory system deficiency is pointed out. There are shortcomings in the management system such as lack of specialized supervision agencies and imperfect information disclosure system. Finally, the article discusses how to improve monitoring systems of our pension fund trusted operation.