A Study On The Efficiency Of Social Security Fund In China

With the rapid development of global economy, the improving of people’s living standards, the apparent aging trend, the pressure of national social security funds paying increases a lot. How to manage social security funds has become an important research frontier of the International Social Security research community all over the world.How to enlarge the scale of social security fund, raise the managing efficiency, avoids the possible risk of the shortage of the fund. Increasing the value of social security fund is urgent. Ensuring the safety of the Fund’s assets, exploring a scientific and rational system of investment operations, and methods of management of social security funds in efficiency, to realize social security funds of maintenance of value and value-added, it is an important issue we face.The annual report of Social Security Fund Council shows that, China’s social security fund had reached856.8billion by the end of2010. According to the World Bank forecasts, the total scale of Social Security Fund in2030will reach1.8trillion, this number is enormous, the fund will lay a solid material foundation for the social security of China, while in fact, as some specific historical reasons China Social Security Fund faces enormous pressure on the value-added, which is divided into four areas:huge potential debt forming from transition the system of national social security fund, the acceleration of the aging population, increasing the proportion of retirees and depreciation of inflation factors. The first three pressures is irreversible, only more money from financial budget can make up. The main issue discussed in this paper is how to avoid the depreciation caused by inflation, to improve the efficiency of investing social security funds, and thus alleviate the social security fund Value-added pressure.This paper studies the background of increasing the value of social security funds as the starting point, through the discussion of the theory of social security funds, and analyzing the operate situation of social security funds, this paper describes the risks and gain return on investment in the process of management of social security funds and. According to the annual report of the Social Security Fund, comes to a conclusion, which is the Fund has made great progress in increasing the value, increase in the scale of the social security fund rapidly. Data shows the average annual growth rate of social security funds has been over9%, increases the value a lot almost, but still behind the stock index on behalf of our capital markets significantly, in consideration of the reality China’s rapid economic development, indicates that the growth rate of National Social Security Fund can be improved.The empirical analysis bases on the data of stocks, which have largest twenty market value by the end of2009from the report of NSSF. Calculating the value of RAROC, from both the risks and benefits in a comprehensive measure, confirmed the efficiency of social security funds in China is low again. The empirical analysis shows National Social Security Fund needs to be optimized the portfolio, and focuses on the index of investment strategies. Finally, to table proposal:a scientific and rational ratio of each portfolio investment assets; by using RAROC, adjusts the portfolio constantly; improve the use of the investment with index further; enrich the investment Species for social security fund, to expand the investment channels of fund.As an extremely important material foundation, the capacity of increasing the value of social security fund, related to the level of social security in present and future directly, the success of the social security system also. Study on the efficiency of the investment of social security fund and the trends of investment in the future, has positive significance both in theory and practice, the study will play a significant role of a health financial market, social stability and sustained progress.