Operation And Supervision Of China's Pension Fund

A large variety of developed and developing countries is facing the problems caused by the progressive aging of the populations, which impose a challenge to its' pension system. In order to invade the existing or will-existing payment crisis of pension fund, many countries have implemented new contribution policy and pension fund operation system, such as established individual accounts accumulating funded system and corresponding administration system of marketing investment operation. These new pension programs have mated the reform of the financial system and the cultivation of capital market. The outcome of the transition is some kind of achievable. State Council Decision #26 of 1997 established the unified pension system include both mandatory funded individual accounts and a social insurance scheme. It consists of a basic benefit a pay-as-you-go system, individual accounts, enterprise supplemental pension, and voluntary supplementary individual accounts. Thus the accumulated pension fund will raise the pressure of it's reservation and increment. Then, great significance will be strengthened on how the fully funded pension enters the capital market and what measure the supervisor will take to attain the benefits. It will be much of importance to promote our pension insurance reform and enhance the development of capital market, if we can realize appreciable market-based returns.As to the frame of the paper, after introducing the history of pension reform, I point out the tendency of Social Security Privatization and the close relationship between the funded pension reform and the capital market. Next I discuss the pension invest strategy, instruments and the rational proportion of each instrument under the basis of study of experience of developed countries and our internal situations. Eventually, I give my suggestion of the supervised system of pension management.