The Research Of Principal-agent Risk On Pension Fund Of China

Pension fund act as the second pillar of insurance system in our country,it is a very important system in the social security.Preserving and increasing the value of pension fund are related to the vast number of retired workers can enjoy their old age,so the depth study of pension fund make great significance.Chinese pension fund rules and regulations require the enterprises and workers who work as trustors must entrust the pension fund to the turstees.This constitutes the first-tier principal- agent relationship.Then the turstees consign with investment managers,fund account managers and custodian mamagers which are responsible for manage the pension fund.This constitutes the second-tier principal-agent relationship.In this two-tier principal-agent relationship,it is bound to be principal-agent risk,which are adverse selection and moral hazard.Based on the existed rules and regulations,the current realities of chinese pension fund,this paper attempts to find interest relationship between various parites.Accordanced with the principal-agent theory,this paper analysis exised principal-agent risk in chinese pension fund,and find out the causes of the risks.Ultimately in order to address the principal-agent risk,we shoud learn from the managemnt experience of foreign pension fund,and give suggestions to solve the risk which inclue two sides:inceitve mechanism,supervision and constraint mechanism.