The Study Of The Chinese Urban Basic Old-age Insurance Individual Account Fund Management

How to fund and manage the individual account pension has become a public focus since the model of "hybrid of PAYG and IA" pension was introduced in 1993. The perfect management model is needed to keep and make the pension fund incremental, and it is a guarantee to clarify the responsibility of different departments. This paper wants to find the best management model according to these rules:first, my research is on the base of our country’s political culture, economy and social situation; second, try to explore a way that is capable of applying to the future’s development with the innovation of the finance system and the change of people’s conscious.Five parts are included in this paper as following:First, to study the origin and history of the public pension with samples of Singapore and Chile. Based on the research, rethink the individual account’s development in our country, and forecast the challenges in the future. How to manage the vast sum of money that we have calculated is one of the main problems.Second, to compare the administration departments, supervisory strategy and individual investment option of IA among the Chile, Singapore and Sweden. We hold that the reasons for these differences lies in the countries’finance efficiency and system goals. It is meaningful for our research to analyze and clarify the reasons which are responsible for the differences.Third, to focus on the comparison of two paradoxes:provincial management or centre-government management, markets entrust management or council entrust management. We hold that centre-governmental council entrust and council entrust management is much better, our proof comes from the forth research and the performance comparison of occupational pension and the national Social Security Fund. Fourth, our studies of individual investment choice of pension fund have shown that:individual can not do as a "rational man" in pension fund management to achieve maximum utility. Two trends have shown apparently in the practice: participation rate in the investment companies’choice has a negative correlation with income levels; the enthusiasm of individual investment choice is decreased. It can be predicted that if we establish individual investment choice in IA, it would be starting in a higher degree of frequency and then gradually reduce the transferring process, and this process will cost more and can not improve the economic situation.In the last part, clarify the government’s role in our model. The investment principle of quantitative restriction has been nail down at present. Then discusses about the government’s guarantee liability and administration department with a conclusion that there would bring a higher benefit for the society if the government play the role of warrantor under the circumstance of no investment options and individual account as the first pillar. A vice minister political level organization is needed in the IA supervision in the finance sector that operate together and supervise dividually.System comparison analysis is our main instrument in this paper. With the comparison of different countries and the comparison of different models we can known what we need. Our innovation presents at the research of the individual option and the duty assignment of the government, market bodies and the individual. We will do more further research in the next future if the system situation would be obtained.