Pension Fund Investment Risk And Prevention Mechanism

1995, as China's old-age insurance system reform China's basic old-age insurance system by a single social planning to combine social pooling and individual accounts system. Corresponding to this, The pension fund raising (referring to the basic old-age insurance) receipt from the past to pay into the system "in support of setting the admission. some balance, some have accumulated, "the accumulation system. In the management structure, at all levels from social security and unemployment insurance, tax departments to collect, supervision of a social insurance fund management institutions at all levels will levy income households Fund to the financial accounts, and a fund balance of the purchase of government bonds or bank deposits, pension funds collected under the depositary bank on behalf of development agreements for modern times.The past, China's old-age insurance funds are raised to pay admission system is based on the principle of balance of payments then raise pensions not to retain reserves, therefore, does not exist insurance fund accumulation. However, with the accumulation of using some of the basic endowment insurance system, supplementary pension insurance and enterprise pension insurance and personal finance through a system of accumulation. The amount has accumulated in the pension funds continue to grow. By 2005, China's basic old-age insurance fund balance has reached 166 billion yuan. These savings funds invested by the local social security departments and investors are not standardized. These funds make no guarantee of safety, not to mention their value targets.Therefore, improving the pension insurance system, accounting separation and reunification of the actual conditions of individual accounts, as most scholars consensus. And July 2001 in Liaoning Province, China has begun to reform social security, the pilot is the core : 11% of the old-age insurance personal accounts from "Account" to reduce the 8% of "small account." and do individual accounts. In addition, the implementation of social insurance funds and management of funds in individual accounts, fund of funds in individual accounts can not be occupied. It is understood to launch a pilot province in 2006 will reach 11 provinces. Along with the actual conditions of individual accounts, maintaining and increasing the value of the endowment insurance fund problems have become increasingly obvious.Judging from experience and increasing the value of the endowment insurance fund is invested in the capital markets. China's current situation, but also have a basic endowment insurance fund investment market conditions. Pension fund will invest in the capital market risk, if the risk can be effectively prevented. Not only the value of pension investment objectives achieved, the pension for their own security could be threatened. Therefore, the study of how to prevent and control the risk management of pension funds is very necessary investment.China's old-age insurance fund investment risk management, from different causes can be divided into two categories: moral risks and market risks.Have the moral hazard, and the pension investment-management model. Internationally, pension fund investment management with access to capital markets in two different ways : private management and public management model. Most scholars have suggested private investment management and supervision of a mixed model. Therefore, in a pension fund investment management, involving the public sector, private sector, the pension payment after three persons. Pension funds, a separation of ownership and management rights. In this way, as the owner and principal agent of the trustee as the inconsistency between the goals, Principal-agent issues arise. Because of asymmetric information and incompatible with clients and agents, agent against client interests, there will be the risk of moral hazard.Market risk refers to changes in market supply and demand imbalance caused market prices caused investors to the risk of changes in income. Generally speaking, market risk is due to the business cycle. In the business cycle, the most common changes in the prices of securities. Of course, the prices of individual securities will occur because of changes in its" own reasons. With the increasing volatility of the global economy and the rapid development of the derivatives market, market risk in the risk management position is now on the rise.Both risks and pension fund investment management, exist. The study endowment insurance fund investment in risk management, research must be done to the two types of risk. This paper is based on this consideration, the risk of old-age insurance fund investment management to analyze the causes and prevention mechanisms. First, the pension fund investment management process model start. From the old-age insurance funds that the risks facing the investment management; Secondly, analysis of multi-agency relationship, and because of information asymmetry caused by the risk of moral hazard; Third, exposition of measurement and control market risks. Finally, based on the above analysis, discussing how to establish risk prevention mechanisms.During the course of composing the thesis, the author embraces the religious attitude, investigated and studied seriously. Because his knowledge is limited, adding the profundity of the theories of principal-agent itself, the author can only do a superficial trial as to fund investment risk control. There must be much deficiencies in the thesis, the author hopes everybody can criticize and point out mistakes so that they can be corrected.