Research Of Principal-agent Risk On Chinese Enterprise Pension Trust

Enterprise annuity originated in the United States, which is a employee benefit plan established voluntarily by employer. Many countries began to set the pension annuity as an important means to ease the government’s financial crisis and deal with the question of population aging form1970s. With the intensification of the degree of population aging, China’s old-age security system is also undergoing profound changes. As a consequence, the establishment of enterprise annuity is of great practical significance to alleviate the pressure and build a wide range of old-age security system.At present, China’s enterprise annuity adopts trust-based operation mode. Enterprises and workers need to entrust the pension fund assets to the trustee as the principal, which constitutes the first layer of the agency relationship. Then the enterprise annuity fund trustees as principal, set legislation agent contract with the investment managers, account managers and managed respectively, who are specifically responsible for the operation of the enterprise annuity fund, which constitutes a second layer of the agency relationship. Under the Two-tier multiple-agency relationship, there must be commissioned by the agency risk, a concrete manifestation of adverse selection and moral hazard. This paper attempts to departure from the existing rules and regulations and the current status quo of China’s Enterprise Annuity Trust, Sort out the interest between the main parties in the enterprise annuity, and according to the principal-agent theory, to analyze China’s enterprise annuity system using the risk of principal-agent game model. Ultimately to learn the enterprise annuity principal-agent risk management experience from other countries and regions, and putting forward some countermeasures and suggestions to solve China’s enterprise annuity trust principal-agent risks.This paper mainly includes the following five parts. The first part is the introduction section. This part briefly expounds the background and significance of the subject, the research methods, the innovation and the deficiency of this article. This part also makes a detailed review on related literature.The second part mainly introduces the theory of agency. The author first introduces the principal-agent risk:adverse selection and moral hazard, then analyses the cause of principal-agent risk, finally the author introduces several classic model of principal-theory theory.The third part is the core of this paper, the author first introduce the our country enterprise annuity development status and the operation mode of the enterprise annuity, and then expounds the principal-agent risk of enterprise annuity trust in our country, finally the author set up a binary tree game model to study the adverse selection and moral hazard and theoretically draws a conclusion.The fourth part is the part of international experience. The author summarizes some successful experience of other countries which including America, Chile and Hongkong of China.The fifth part is some countermeasures and suggestions which could improve the management of principal-agent risk in business enterprise annuity of China. There are six suggestions:1) to construct the competitive market of enterprise annuity;2) to build the effective mechanism of information disclosure;3) to strengthen the regulation of the agent and the third party;4) to build efficient legal system;5) to improve the agent incentive mechanism;6) to try to form the bidding mechanism of pension agent.The author sums up the characteristics of the principal-agent risk, and builds a binary tree game model to study the principal-agent risk, which is the innovation of the paper. There are also some shortcomings in this paper. As the market in China’s enterprise annuity operating is not long, there is lack of an open data platform, and then the lack of relevant data will affect the depth of the analysis.